Scotland’s private-sector output rose in June but at a slower pace than May, according to The Royal Bank of Scotland Growth Tracker. Employment also rose in Scotland, though growth was at its second-weakest rate since the current expansion began in February 2023.

Some firms had success filling long-standing vacancies, but the wider economic climate and reduced client activity resulted in others lowering their staffing levels, according to the report.

However, inflationary pressure continued to subside.

Overall, the growth tracker’s headline Business Activity Index fell to a reding of 51.9 in June from 55.2 in May. However, the reading in June remains above the neutral mark of 50.0.

“The Scotland Growth Tracker signalled modest gains in private sector activity during the latest survey period. While the upturn lost momentum, as the service sector observed a notable cooldown in June, the ongoing downturn in the manufacturing sector showed further signs of easing as output was broadly stable, and the downturn in new orders moderated.”

Businesses in Scotland were less optimistic than the UK private sector as a whole, according to the report.