The latest Royal Bank of Scotland PMI survey shows private sector business activity in Scotland rebounded in April, growing slightly.

The expansion was driven by services, as manufacturing output declined.

A similar trend was seen in new orders, although employment rose in both sectors in April.

Overall, firms expect activity levels to increase over the coming year, but the degree of confidence slumped to its lowest in two-and-a-half years.

The seasonally adjusted headline Royal Bank of Scotland PMI increased to 51.0 in April, from 49.6 in March, signalling a return to expansion in private sector output.

It was solely driven by a renewed upturn in the services sector.

While service providers mentioned improvements in demand, manufacturers reported weakness in the global goods-producing market.

Nonetheless, the overall rate of private sector growth in Scotland was broadly in line with that recorded for the UK as a whole.

Expectations towards future output were positive in April at both manufacturers and service providers.

However, the degree of optimism eased to its weakest since October 2016.

Some firms indicated that economic uncertainty, particularly surrounding Brexit, remained of concern.

Malcolm Buchanan, chair, Scotland Board, Royal Bank of Scotland, said: “At first glance, latest survey data for Scotland revealed an improvement in economic conditions, but upon closer inspection, we see that the upturn in April was solely driven by the service sector, as manufacturing weakness continued into Q2.

“While service activity was given a boost by a small revival in demand, manufacturing output continued to lag as order book volumes shrank, with economic uncertainty and a sluggish global goods-producing market weighing on manufacturers.

“Subsequently, firms recorded a cautious year-ahead outlook, with business confidence at a two-and-a-half-year low in April.”