The private sector saw higher staffing levels and a return to growth in January, compared with the previous month.
The Bank of Scotland's latest PMI survey shows the expansion comes as confidence reached a 43-month high.
Fraser Sime, regional director, said: "The upturn was led by manufacturers, while service providers signalled a fractional decline in output.
"Both new business inflows and employment increased in the Scottish private sector, fuelling stronger business confidence.
"The degree of optimism in the future rose to a 43-month high in January.
"That said, input cost inflation remained far greater than that of selling prices, indicating tighter profit margins."
The bank's measure of the month-on-month change in combined manufacturing and services output registered at 50.3 in January, from 49.4 in December.
Greater staffing levels helped Scottish private sector firms to clear outstanding business.
Backlogs of work were reduced in January, although to the softest extent since September last year.
New business inflows rose "markedly" in the manufacturing sector, supported by attracting new customer and export growth.
In the service sector, panellists reported that successful tendering had contributed to higher order intakes.