GROWTH of Scotland’s private-sector economy accelerated in April to its fastest pace in eight months and overall employment increased for the first time since January 2020, amid a loosening of coronavirus-related restrictions, a key survey reveals.

Royal Bank of Scotland’s latest purchasing managers’ index report, published today, also shows the fastest overall monthly rise in new work for companies north of the Border for nearly three years.

The business activity index for Scotland rose from 54.3 in March to 55.4 in April on a seasonally adjusted basis, moving further above the level of 50 deemed to separate expansion from contraction. However, while the best for eight months, the growth rate signalled by this index was behind that for the UK as a whole.

The modest increase in employment in Scotland’s private-sector economy last month was driven by the manufacturing sector.

Royal Bank said: “Amid reports of surging demand and hopes of sustained growth, Scottish companies increased their workforce numbers during April. This marked the first round of job creation since January 2020, before the Covid-19 pandemic. The rate of increase in employment was marginal overall, but slightly above the…long-run average.

“Sectoral data highlighted a notable divergence, however, with new jobs concentrated in manufacturing. Service sector employment meanwhile continued to decrease, although the rate of reduction slowed on the month.”

Scottish companies remained optimistic about the prospects for increased activity on a 12-month horizon.

Malcolm Buchanan, chair of Royal Bank's Scotland board, said: “April data highlighted further gains for the Scottish private sector as it continues on its recovery path. Business activity rose for the second month in a row, with the latest upturn the strongest for eight months."

He added: "Further positive news came from employment, with companies adding to staff numbers for the first time in over a year – a clear sign that firms are confident of a recovery. Indeed, the year-ahead outlook for activity remained historically elevated.

“Overall the data are very encouraging and suggest the private sector has turned a corner towards recovery. With lockdown measures set to ease further, we should see a sustained rebound in the months to come.”