The Bank of Scotland’s regional purchasing managers’ index (PMI), which measures the month-on-month change in combined manufacturing and services output, rose to 51.5 in May from 50.6 in April.
Businesses put the growth down to expansion in the services sector, while manufacturing production also remains strong.
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May’s data also indicates a rise in business confidence towards the next 12 months, hitting a four-month high. The firms surveyed in the report attributed confidence to “an unexpected economic upturn”.
Fraser Sime of Bank of Scotland said: “Latest PMI data signalled the Scottish private sector moving up a gear, as growth reached a three-month high.
“The positive news was driven by rises in combined output and new orders, fuelled by solid underlying demand.”
Cost pressures eased, although only marginally, and remained steep overall, with high raw material prices one factor cited.
Sime said: “Easing price pressures added to the overall improvement in business conditions. That said, Scottish private sector growth remains below that of the UK as a whole.”
Economy secretary Keith Brown said the figures “show the Scottish economy remains resilient and we will continue to do all we can to support growth.”