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Stronger manufacturing sector

Factory output growth at fastest for 19 months

Wireline industryOutput from Scotland’s private sector, particularly manufacturers, is growing at it fastest rate for 19 months, according to new data. 

The seasonally adjusted headline Bank of Scotland purchasing managers’ index also showed inflationary pressures continued during February.

Rising wages, unfavourable exchange rates and higher raw material prices contributed to a substantial increase in input prices that was marked in comparison to historical standards.

Higher input costs faced by firms lead to the second-quickest rate of output charge increase since April 2011.

Fraser Sime, regional director, Bank of Scotland Commercial Banking, said: “The upturn was driven by a strong performance in the manufacturing sector, where production increased at the fastest pace since January 2014. That said, the overall rise in activity was still only modest. 

“Despite the region growing at a stronger pace, the growth is weak in the context of historical data.

“Businesses continue to record ongoing spare capacity, reflected in a further reduction in staffing levels, while inflationary pressures remain substantial.

“With new business also growing at a weaker rate, firms will be wary that the upturn may soften if client’s appetite for Scottish goods and services decreases further.”

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