It is difficult to know what to make of the latest Bank of Scotland PMI data for private sector business activity in June. As the chart below shows the data, on the face of it, offer good news about the Scottish economy.
Private sector output growth appears to have strengthened in Scotland whereas it weakened in the UK. In addition, net new jobs were created across all sectors while employment growth slowed in the UK and was weaker than in Scotland.
But the weakness of manufacturing compared to services and the fall in new export orders is a clear cause for concern given the slowdown in the world economy and continuation of problems in the eurozone.
What the PMI data show is that private sector growth continued to be positive for the eighteenth consecutive month. The chart also shows positive monthly growth in the UK.
Yet, these data would appear to conflict with ONS outturn data for the UK. The ONS data reveal falling activity in the final quarter of last year and first three months of this year. In the ONS data the difference is not simply due to falling output in the public sector. There is a wide divergence between the PMI and the ONS outturn data in construction and in services - see here page 17 - with the PMI suggesting growth is stronger.
In addition, while a representative sample of some 600 Scottish firms is surveyed for the PMI, we are not told the response rate.
So, these new data are to be welcomed but we must be cautious about what they tell us about the growth of the Scottish economy. We will not know until later this month whether the Scottish economy experienced a drop in output in the first three months of this year. It seems likely that it will follow the UK even if the drop is not as large as the -0.3% UK fall. And if it does that will contradict the Scottish PMI, which showed growth in each of the three months.