Bank of Scotland PMI: Scottish private sector continues to expand moderately

09 October 2017

  • Headline PMI remains at 52.2 in September

  • Employment growth eases to marginal pace

  • Rising cost pressures lead to further increase in output prices

September’s PMI® survey signalled a modest expansion in Scottish private sector output, with the rate of growth unchanged from that seen in August.                                                         

The seasonally adjusted headline Bank of Scotland PMI - a single-figure measure of the month-on-month change in combined manufacturing and services output - remained unchanged from August at 52.2 in September. The latest data indicated a moderate pace of growth, extending the current sequence of expansion to ten months.

Latest composite employment data signalled the slowest rate of growth in staff numbers in the current four-month period of rising headcounts.

In line with the trend over the past 18 months, input price inflation remained sharp in September, picking up to the quickest pace since May. Respondents noted that adverse exchange rate effects and raw material price hikes intensified cost pressures across the Scottish private sector.

Despite the uptick in input costs, prices charged increased at a slower rate than that seen in August.  Nevertheless, latest data marked the fourteenth successive month of output price rises.

Finally, confidence rose sharply in September, led by manufacturers signalling the highest degree of optimism in 28 months.

Fraser Sime, Regional Director, Bank of Scotland Commercial Banking said:

“Scotland’s headline PMI remained unchanged from August at 52.2 in September, indicating stable private sector growth. 

“Despite flatter momentum in output, new order growth picked up from August, signalling a modest rise. The upturn in new business, however, did not facilitate stronger job creation, with the rate of employment growth only slightly above the no-change mark.

“Although cost pressures intensified further in September, led by sterling depreciation and raw material price hikes, output prices remained relatively modest. Nonetheless, business confidence over the coming 12 months remained buoyant.”