Scotland continues to see strength in recovery

Marked increases in business activity and new work led firms to raise employment levels, as backlogs of work accumulated for the first time in close to two years. Input prices faced by businesses meanwhile rose at a slightly faster pace, though competitive pressures ensured output price inflation remained muted.

Business activity in Scotland's private sector economy rose sharply in June, and at the fastest rate since the height of the upturn before the 2008/9 financial crisis. The Bank of Scotland PMI rose for the third straight month to 57.0, up from a reading of 54.4 in May.

This also indicated a slightly faster expansion in output north of the border than across the UK as a whole over the month. Scotland's expansion was broad-based by sector, with both factory output and service sector activity up markedly.

June meanwhile saw a survey-record increase in the level of new business placed with firms in Scotland. Growth in new work was principally driven by resurgent demand in the domestic market, with manufacturers recording a further loss of new business from clients overseas.

Donald MacRae, chief economist at Bank of Scotland, said: "June's PMI rose to the highest level since May 2007, signalling a sharp acceleration in growth of the private sector of the Scottish economy in the month.

“Both the services and manufacturing sectors recorded rising activity and output, accompanied by growth in employment. This growth spurt is domestic based with new export orders out with the UK falling for the second successive month.

“Nevertheless, these results provide more welcome evidence of the growing strength of the recovery in the Scottish economy."