Scotland’s economy is showing two very different faces this summer. On one hand, the services sector is holding strong, with tech firms, consultants, and finance outfits enjoying a modest but steady climb. On the other, Scotland’s once-mighty manufacturing industry is feeling the squeeze — struggling with fewer orders and costs that keep inching up. For folks looking to invest or make sense of what’s next, this divide might be the clearest clue in years about where the real opportunities lie.
Services Keep the Wheels Turning
Let’s start with the good news. According to the latest Royal Bank of Scotland Growth Tracker, Scotland’s services output in June clocked in at 50.9. Not fireworks, but the best reading since late last year.
Aime Douglas, an investment analyst based in Edinburgh, says it’s a sign that the country’s economic engine is leaning more than ever on services. “It’s our buffer against bigger shocks,” she said.
Tech and professional services top the list. Information and communication notched a 1.3% quarterly bump. Finance isn’t far behind, lifted by new project funding.
One line: If the Scottish economy were a boat, services are the steady oars keeping it from drifting backwards.
Manufacturing’s Storm Clouds
Manufacturing is another story. Orders are falling. Energy costs are biting hard. Add to that ongoing trade spats, red tape, and shifting supply chains after Brexit — and you’ve got a sector trying to tread water with one arm tied behind its back.
One factory owner in Fife put it bluntly: “We can’t keep raising prices, but our costs keep rising. There’s no easy fix.”
Shorter weeks and leaner inventories have become the new normal for many.
The Numbers That Tell the Tale
It helps to see the split on paper, so here’s a quick snapshot based on the latest RBS figures:
| Sector | Q2 2025 Growth |
|---|---|
| Information & Communication | +1.3% |
| Financial Services | +0.9% |
| Consumer Services | +0.7% |
| Manufacturing | -0.6% |
Where the Smart Money’s Going
So, what does this all mean for people trying to park their money wisely? Aime’s take is simple: pick the side that’s growing, but don’t write off manufacturing entirely.
She breaks it down like this:
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Stick with services that have shown resilience: tech, finance, professional consulting.
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Be selective in manufacturing: niche players tied to local supply chains may dodge global trade shocks better than big exporters.
One short note: It’s about balance, not blind bets.
Not All Sunshine
Of course, services can’t fix everything. For rural areas dependent on industrial jobs, the downturn hits hard. Communities that once thrived on textiles or heavy machinery now face tougher choices.
A local councillor in Ayrshire says job losses ripple out to everything from local pubs to primary schools. “When the factory slows, the whole town feels it,” he said.
One sentence: Growth in Edinburgh’s sleek new office towers doesn’t always reach the high street in Falkirk.
How the Government Could Help
There’s growing pressure on Holyrood and Westminster to back manufacturing with real support — not just headline-grabbing green investments but the boring stuff too: skills training, energy help, smoother trade routes.
Until then, the services sector will carry the weight.
The Long View
What’s next? Economists say the split is likely to stick around for a while. Aime sums it up best: “Scotland’s future is a mix. Services will keep pulling ahead, but we need industry to stay afloat too — otherwise that rising tide doesn’t lift every boat.”
One line: For now, the smart money’s watching which boats are still rowing hardest.
