Brexit fuels cost woe but Scottish economy grows strongly

SCOTLAND achieved the third-fastest growth among the 12 nations and regions of the UK in September, even though its expansion eased to its slowest in five months as manufacturing went into reverse, a survey shows.

Employment growth north of the Border was also the third-fastest of the 12 UK nations and regions covered by the Royal Bank of Scotland survey, published today.

This survey, which covers the private-sector economy, also flags intense inflationary pressures fuelled partly by Brexit. The rate of increase of costs for Scottish companies was last month the fastest since July 2008, “and rapid”.

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The business activity index for Scotland, a composite measure of manufacturing and services activity, fell from 58.1 in August to 56.1 last month on a seasonally adjusted basis, remaining well above the 50 no-change mark and continuing to signal sharp expansion. Scotland’s private-sector economy has now expanded for seven consecutive months, according to the survey.

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Royal Bank noted a “sustained upturn in services was slightly offset by a renewed fall in manufacturing output”.

The survey shows a 16th consecutive monthly rise in costs facing Scottish companies.

Royal Bank said: “Greater material, fuel and wage costs, logistical issues, Covid-19 and Brexit were all cited as drivers of cost inflation.”

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On the back of this, Scottish private sector firms raised their average charges for the 11th month in a row in September.

Panellists attributed the latest uptick to the “partial pass-through of greater costs to clients”, Royal Bank of Scotland noted, with the rate of output price inflation the highest since the survey began in November 1999.

The Herald Scotland

The Herald Scotland

The Herald is a Scottish broadsheet newspaper founded in 1783. The Herald is the longest running national newspaper in the world and is the eighth oldest daily paper in the world. The title was simplified from The Glasgow Herald in 1992