Scotland and the North West of England experienced the fastest declines in private sector activity among the 12 regions and nations of the UK in the final quarter of 2024, according to a key monitor.

New business at Scottish private sector firms fell in each month of the final three months of the year, a shift from the growth seen in the third quarter.

The Royal Bank of Scotland Growth Tracker fell below the neutral level of 50.0 for the first time in a year, recording 46.9 in December, down from 51.1 in November.

The decline in the period just prior and after the Chancellor’s Budget was sharp, and marked the most significant drop in activity since October 2023, with both manufacturing and services sectors reporting a decrease in output.

After 22 consecutive months of growth, employment in Scotland’s private sector declined in December. Contributing factors included reduced business activity, redundancies and the non-replacement of voluntary leavers.

Judith Cruickshank, who chairs the Scotland Board, at RBS, said: “Following an impressive 11-month growth period, during which the average Growth Tracker reading was 52.5, 2024 ended with a renewed decline in activity across Scotland’s private sector experienced.

“Companies are reporting a more cautious outlook for the new year, driven partly by a decrease for the third consecutive month in new business.

“Additionally, there has been a resurgence in job cuts, as firms align their staffing levels with reduced business demands. Whether this is a temporary fluctuation, time will tell.”

Sebastian Burnside, Royal Bank of Scotland chief economist, added: “Whilst the UK economy has lost momentum in recent months two regions remained strong as 2024 came to a close, namely London and the North East.”

“Business costs rose more quickly across three-quarters of the UK’s nations and regions in December, underpinned by increasing wages and salaries.

“With these costs expected to rise further in the coming months as the announced increases in employers’ national insurance contributions and the national minimum wage come into effect, firms’ growth expectations are subdued by historical standards in most parts of the UK.”

Persimmon rises

Housebuilder Persimmon has posted a 7% rise in completions, ahead of market expectations.

Dean Finch, group chief executive, said: “We expect to report an underlying operating margin in line with the prior year, as previously guided, with 2024 underlying profit before tax expected to be around the upper end of market expectations.

“Customer enquiries and sales rates have been consistently ahead of the prior year since the spring selling season.

“Persimmon has worked hard and is well positioned for the future, supported by the land and planning investment we have made in recent years, our vertical integration capabilities and our excellent teams.

“This investment, coupled with the government’s ambitious planning reforms which demand more of the high-quality, affordable homes which are Persimmon’s core strength, supports our growth ambitions in the medium-term.”

Call for change on oil and gas

Aberdeen and Grampian Chamber of Commerce has repeated its demand that the SNP reverses its ‘presumption against oil and gas’.

Chief executive Russell Borthwick said: “The presumption against oil and gas is disconnected from reality, as we saw last week when Centrica warned that our gas storage levels were at a dangerously low level.

“Even the most optimistic projections show that hydrocarbons will remain part of the energy mix for decades – the International Energy Agency acknowledges this reality, so why is the Scottish Government burying its head in the sand?”

Mr Borthwick made the same plea last September when he described the SNP’s policy as “wrong headed”.

At the time he said the closure of Grangemouth refinery and a devastating report from analysts at Wood Mackenzie should be grounds for “focusing minds’” at the Scottish Government.