Scottish private sector output growth surged to a 33-month high in the third quarter of 2017, according to the latest Bank of Scotland PMI (purchasing managers’ index) survey.

Job creation was at a 31-month high in the latest survey, signalling an expansion in the Scottish private sector workforce for the second month running.

Output rose at the fastest pace in nearly three years, reflecting stronger expansions in both manufacturing and services.

Increased output was driven by a steady expansion in new business in July.

The manufacturing sector registered strong growth in new orders, while new business in the service sector rose at a comparatively moderate rate.

The seasonally adjusted headline Bank of Scotland PMI, a single-figure measure of the month-on-month change in combined manufacturing and services output, rose to 53.8 in July, from 51.1 in June.

The latest data indicated the strongest growth of Scottish private sector output in 33 months.

It also extended the current trend of expansion to eight months, the longest sequence since 2014.

Comments gathered in the survey suggested that firms responded to higher output requirements by hiring additional staff.

Sentiment towards the future remained positive overall, and matched June’s confidence reading.

Fraser Sime, Regional Director, Bank of Scotland Commercial Banking said: “July’s survey results signalled the Scottish private sector moving up a gear, as the PMI posted its strongest result in 33 months.

“This good news was fuelled by the service sector returning to meaningful growth, alongside a faster increase in manufacturing output.

“Job creation remained positive for the second month running, with July marking the fastest expansion in employment in over two-and-a-half years.

“Employment growth was consistent across the manufacturing and service sectors.

“Input price inflation remained strong in the latest survey, with many firms citing wage inflation and the exchange rate.

“That said, the positive effects of a subdued currency could be seen in the growth of manufacturing exports in July.”