By Ian McConnell

Business Editor

Growth of Scotland’s private-sector economy accelerated sharply in May on the back of the easing of coronavirus-related restrictions, with rates of expansion and job creation the fastest since comparable records began in 1998, a key survey shows.

The purchasing managers’ index report, published today by Royal Bank of Scotland, also shows a surge in input costs during May, with the rate of increase accelerating to the fastest for a decade. Rises in raw material and shipping costs were cited by survey respondents.

Royal Bank’s business activity index for Scotland climbed from 55.4 in April to 61.5 in May on a seasonally adjusted basis, moving much further above the 50 no-change mark to signal the fastest monthly growth of the private-sector economy since the survey began in January 1998.

Sharp expansion was recorded across both the Scottish manufacturing and services sectors.

The rate of growth in Scotland in May was faster than that in London, the East Midlands and Northern Ireland, but behind the pace of expansion in other parts of England and in Wales.

Employment in Scotland’s services sector rose in May for the first time in 16 months and at the fastest pace on record. Job creation in manufacturing accelerated in May to its sharpest rate for nearly seven years.

Optimism among Scottish companies about the prospects for increased business activity on a 12-month horizon rose last month to its highest since records began.

Both the manufacturing and services sectors were optimistic about prospects.