The latest Royal Bank of Scotland Purchasing Managers’ Index (PMI) found the coronavirus-related downturn in the Scottish private sector “eased noticeably” in July. The report’s Business Activity Index – a measure of combined manufacturing and service sector output – registered 49.3 in July, up from 37.1 in June.

It also found the softest fall in private sector output since March.

While private sector firms reported a reduction in new business in July, confidence strengthened to a five-month high.

The optimism is linked to hopes of an economic recovery once lockdown measures are lifted, the report suggested.

However, it reported a reduction in Scottish private sector employment for the sixth month in a row.

Malcolm Buchanan, chairman of the Scotland board at Royal Bank of Scotland, said the July data shows some encouraging signs.

But he warned that while July’s figures “are a significant step in the right direction, we are still yet to see growth”.

He added: “A possible ‘second wave’ of the pandemic and reintroduction of lockdown measures in regions such as Aberdeen has the potential to derail any further moves towards a recovery.”

First Minister Nicola Sturgeon imposed the first second Scottish lockdown this week after a coronavirus cluster in Aberdeen rose to 110 cases, with the number of people required to self-isolate doubling overnight to more than 600.

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“Overall, data are moving in the right direction, with signs that the labour market is edging towards stabilisation, but it is likely that it will take more time before any meaningful recovery takes place.”

Dr Liz Cameron, Chief Executive of the Scottish Chambers of Commerce, told Express.co.uk that more support was needed for businesses.

She said: “This will be very disappointing news for many businesses in Aberdeen who have just opened back up over the past few weeks and who were beginning to return to some form of normality.

“Further targeted government support will be required for all businesses affected, specifically those in indoor and outdoor hospitality who have been ordered to close tonight in Aberdeen.

“Collaboration and cooperation between business, government and agencies will be critical to provide clarity and provide support to help businesses mitigate further disruption.”

Further local outbreaks are understood to be likely across Scotland as the number of deaths currently stands at 2,491 and the number of cases 18,890.

source: express.co.uk

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