Scottish business confidence ‘downbeat’ following 28-month low
Royal Bank of Scotland data shows the economy contracted in February, with Brexit uncertainty impacting confidence.
Business confidence in Scotland hit a 28-month low amid Brexit uncertainty, according to Royal Bank of Scotland’s latest figures.
The country’s economy faced a downturn in February, with private sector business activity falling and a sharp drop in production by the manufacturing sector.
Of the 12 monitored parts of the UK, a further two recorded contraction – the North East and London.
Business confidence dipped for a third straight month reaching the lowest since October 2016, while optimism in Scotland was the second-weakest across the UK.
Brexit and concerns tabout the domestic economy were commonly cited factors, according to the bank’s Purchasing Managers’ Index (PMI) survey.
The latest PMI data revealed that Scotland’s private sector economy was subdued, with key gauges of business health, such as output and new orders, falling.
However, employment in Scotland saw a very-small increase, marginally up from January’s figures.
The seasonally adjusted headline PMI registered below the 50.0 no-change threshold in February, signalling a further decline in private sector business activity.
At 49.4, the headline figure was slightly up from January’s 49.2, but signalled divergence from the overall UK picture, where output increased.
Malcolm Buchanan, the chair of the Royal Bank of Scotland’s board in Scotland, said: “Latest PMI data for Scotland portrayed a further downbeat assessment of the economy north of the border, with the two key business health gauges of output and new orders both in contraction territory.
“Indeed, relative to the other 11 monitored areas of the UK, Scotland was among the underperformers.
“Weighing on the economic climate in Scotland was uncertainty, particularly relating to Brexit and the knock-on effects this will have on client confidence.
“Business optimism subsequently dwindled to a 28-month low in February.
“Caution was also signalled by employment data, which showed just a rate of growth below the long-run trend.”
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