Economic recovery in Scotland is becoming more strongly embedded by the month, according to research by a bank.
The private sector showed marked improvement, output was up and there has been the fastest rise in employment for more than a year, the Bank of Scotland said.
Looking at analysis for May, the bank said output growth is at a 25-month high.
But exports took a dip, suggesting the impact of wider recession in the eurozone.
Donald MacRae, chief economist at the Bank of Scotland, said: “Output grew in manufacturing and activity was strongly up in the large services sector with an encouraging rise in new orders across the economy evident for the sixth month in succession.
“However, growth appears confined to the domestic market with new export orders falling slightly in the month illustrating the effects of the recession in the eurozone.
“These results show the recovery in the Scottish economy is becoming more strongly embedded with every passing month.”
The comments come days after a report showed foreign investment in Scotland reached a 15-year high last year.
A total of 76 foreign direct investment (FDI) projects were secured in 2012, the largest number since 1997 and 49% more than in 2011.
Finance Secretary John Swinney said: “Against a backdrop of continuing economic challenges the Scottish Government is taking action where we can, and we are seeing results, but there is so much more that we could be doing with the full economic and fiscal powers of independence to strengthen our economy and create jobs.
“Scotland continues to show a higher employment rate and lower unemployment rate than the UK - as well as stronger economic growth in the most recent quarter and youth unemployment figures that continue to outperform the UK.
“But we will not rest on our laurels. We recognise that market conditions remain challenging and that is why the Scottish Government remains committed to investing in jobs and training. Our budget includes a tax relief package for business worth over £540 million this year and we are bringing forward a further £385 million package of economic stimulus to support jobs across the country.”