Scottish private sector activity rose further in June, according to new insights from the Royal Bank of Scotland and its Growth Tracker.

The Growth Tracker—a seasonally-adjusted index that measures the month-on-month change in the combined output of the region’s manufacturing and service sectors—rose to 50.9 in June from 50.5 in May.

This marked a second-consecutive monthly rise in business activity. While the uptick was modest overall, it was the strongest since November 2024.

However, as was the case in May, activity growth remained solely driven by the service sector. Service providers noted that new project funding underscored the uptick in activity. Meanwhile, manufacturing production continued to fall sharply.

The sustained rise in overall activity was accompanied by improved confidence regarding the year ahead’s outlook for output. Notably, the degree of optimism was the strongest in eight months.

Confidence across Scotland was supported by plans to introduce new product lines, improved operational performance, and strategic marketing efforts.

Comparatively, the UK as a whole saw output growth accelerate to a nine-month high, driven by expansions in business activity across eight of the 12 nations and regions monitored by the survey.

Further, new business rose for the first time in seven months at the UK level.

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Commenting on the Tracker’s findings, Judith Cruickshank, chair of the One Bank Scotland Board, said: “Scotland’s private sector recorded a sustained uptick in activity at the end of the second quarter, with growth predominantly driven by service providers.

“In contrast, the manufacturing sector faced a challenging demand environment, leading to overall declines in new business and production.

“Despite these sectoral differences, firms exhibited increased optimism about the future, with manufacturers reporting positive growth forecasts for the first time in three months.”

Cruickshank also highlighted that: “In June, private sector firms encountered sharply rising operating costs, but selling price inflation slowed notably. This suggests a willingness among businesses to absorb some costs to bolster sales.

“The employment landscape remained broadly stable compared to the previous month, with sector data continuing to highlight diverging trends between manufacturers and service providers.”