The Scottish private sector indicated a quicker expansion in activity during June, according to the latest Royal Bank of Scotland PMI data.
At 53.2 in June, up from 50.7 in May, the seasonally-adjusted Scotland Composite Output Index extended the current run of increases to five successive months.
The upturn across Scotland also surpassed that seen at the UK level, placing third in the UK regional rankings table behind London and the south east.
Despite remaining historically sharp, inflationary pressures showed further signs of easing from the highs seen in the previous two years.
The rate of Scottish expansion quickened in June, mainly due to a faster increase at services providers. Survey panellists noted that greater demand and a general market improvement helped drive the upturn, while manufacturing new orders fell at a slower rate.
Sentiment stemmed from planned growth in business, anticipated increases in sales and the launch of new products.
Private sector companies across Scotland registered a fifth successive monthly rise in employment during June. New projects and contracts encouraged firms to raise their payroll numbers, anecdotal evidence suggested.
The pace of job creation eased to a four-month low, however, amid softer expansions across both the manufacturing and services sectors. The upturn in workforce numbers across Scotland was weaker than that seen at the UK level.
A further fall in backlogs was reported across Scotland during June. The overall decline reflected a further sharp drop at manufacturers as new orders continued to decline. This was, however, almost offset by a rise in outstanding business at service providers.
Inflationary pressure on input prices continued to cool across the Scottish private sector in June. The respective seasonally adjusted index has ticked down in six of the last seven survey periods, printing a 25-month low in June.
Nonetheless, the pace of inflation remained well above the historical average and was the second-steepest of the 12 monitored UK regions, behind only London. According to anecdotal evidence, wages and increased supplier costs fuelled the latest increase in cost burdens.
In line with easing price pressures, charges levied for the provision of goods and services also rose at a slower rate across Scotland in June. The pace of output charge inflation was the second-softest in 26 months, but remained historically elevated.
Growth at which charges rose across Scotland was broadly in line with that seen across the UK as a whole.
RBS chief economist Sebastian Burnside commented: "As we reach the halfway point in the year, it’s an appropriate time to evaluate the trends we've seen up to this point and those that are developing as we move into the third quarter.
"Growth so far this year has been led by London, which after a sluggish end to 2022 has recovered strongly and recorded sizeable rises in business activity for the past five months.
"There were some positive takeaways in the latest survey data, including a broad-based easing of price pressures.
"All areas recorded a slower rise in business costs in June, but in some cases, particularly in London and Scotland, the rates of input price inflation remained historically elevated due in large part to growing wage bills."
He added: "Tight labour market conditions look likely to persist for the time being, with nearly all regions recording an increase in employment in June, which means underlying price pressures could stay higher for longer too."
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