The Scottish private sector returned to growth during August, with business activity rising at the quickest pace for more than six years amid the fastest uptick in new work since late 2018, according to the latest Royal Bank of Scotland PMI (purchasing managers’ index).

The seasonally adjusted headline Royal Bank of Scotland Business Activity Index — a measure of combined manufacturing and service sector output — rose from 49.3 in July, to 55.8 in August, to signal the first increase in Scottish private sector output since February.

The latest figure was the highest for over six years.

“Growth was broad-based at the sector level, although uneven, as manufacturers registered noticeably sharper increases in both output and order book volumes than service providers,” said the report.

“Adjusted for seasonal factors, the New Business Index posted above the 50.0 threshold for the first time in six months during August to signal an increase in new work at Scottish firms.

“Moreover, the rate of expansion was the quickest since October 2018. The easing of lockdown measures and improved client demand were frequently associated by panellists to the rise.

“The 12-month outlook for activity among Scottish private sector firms remained positive for the fourth month running during August.

“Anecdotal evidence linked confidence to improved demand conditions amid looser lockdown restrictions, alongside hopes of a timely recovery from the economic blow dealt by the pandemic.”

Malcolm Buchanan, Chair, Scotland Board, Royal Bank of Scotland, said: “The Scottish private sector showed some very encouraging signs in August.

“Business activity rose at the quickest rate since July 2014 and new orders increased for the first time since February, amid reports that looser lockdown restrictions had allowed the economy to reopen and released pent-up client demand.

“Still, things are not back to normal.

“Capacity pressures remained weak and, as a result, firms made further cuts to their workforces.

“The rate of job shedding remained sharp, despite easing further from April’s record.

“Although data provided positive signs that the recovery is beginning, ongoing improvements in demand conditions are needed to ensure it keeps momentum.”