Scotland’s private sector output increased for the first time in three months in September — with the rate of expansion the fastest for 14 months as companies recorded higher levels of new business and employment.

The Bank of Scotland Purchasing Managers’ Index (PMI) rose to a 14-month high of 51.2 in September, up from 49.1 in August.

The latest figure ended a two-month period of contraction, as both manufacturers and service providers reported higher business activity.

Volumes of new business in Scotland’s private sector rose for the first time since June.

Meanwhile, jobs growth continued during September, albeit at a slower pace. A number of panellists linked the rise in headcounts to efforts to support the expansion in output.

On the price front, firms raised their selling prices at a slower pace despite facing the fastest increase in input costs for 33 months.

Nick Laird, Regional Managing Director, Bank of Scotland Commercial Banking said: “An upturn in Scotland’s private sector was signalled in September, as the headline index rose to a 14-month high.

“The improvement in the economy was equally shared between service providers and manufacturers, who both registered modest increases in output during the month.

“Demand for Scottish goods and services also rose, highlighted by a rise in new business.

“On another note, firms faced the fastest increase in input costs for 33 months, putting pressures on firms’ margins as we approach the end of the year.”

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