The latest Royal Bank of Scotland Growth Tracker data signalled stronger business conditions across Scotland’s private sector at the start of the final quarter of 2026. Firms recorded fresh increases in both output and new orders, while staffing levels rose further and business confidence improved.
The headline Royal Bank of Scotland Business Activity Index – a seasonally adjusted index that measures the month-on-month change in the combined output of Scotland’s manufacturing and service sectors – posted above the neutral mark of 50.0 for the first time in seven months in October. Moreover, a reading of 52.4, up from 48.8 in September, indicated the strongest rise in activity since August 2024.
Renewed increases in activity were recorded across both manufacturers and service providers. Anecdotal evidence often linked growth to improved customer demand and firmer economic conditions.
Scottish private sector employment rose for a fifth consecutive month in October. According to anecdotal evidence, payrolls were raised to meet current production needs and expand capacity for anticipated projects. The pace of job creation was the slowest in four months.
Commenting on the Tracker’s findings, Iain Morrison, Scotland Managing Director, Commercial Mid-Market, Royal Bank of Scotland, said:
“October marked a clear turnaround for Scotland, with output returning to growth. While services were the main growth engine, manufacturing also provided a modest lift.
For the first time in over two years, demand improved, with new business expanding. Employment also continued to rise, albeit at a slowing pace compared to the previous four months. Together, these positive indicators suggest a more upbeat end to the year.
However, inflation remains high and continues to intensify. This presents a threat that could choke off the return to growth for Scottish businesses that we are seeing in this report.”
Image of Iain Morrison here
