The latest IHS Markit-Royal Bank of Scotland Purchasing Managers’ Index (PMI) report shows that the easing of Covid-19 restrictions led to a ramping up of output in the Scottish private sector during May.

The seasonally adjusted headline Royal Bank of Scotland Business Activity Index — a measure of combined manufacturing and service sector output — posted 61.5 in May, up from 55.4 in April and signalling a substantial monthly increase in activity.

The rate of growth was the steepest since the survey began in January 1998.

Sharp expansions were recorded across both the manufacturing and service sectors.

Respondents mainly linked higher activity to the loosening of lockdown restrictions, with new business also increasing at an unprecedented pace.

“In response to higher workloads, companies scaled up employment to an extent previously unseen in the survey’s history,” said the report.

“Inflationary pressures strengthened, with both input costs and output prices rising at sharper rates.

“The easing of COVID-19 lockdown restrictions and associated improvements in customer demand and confidence supported a sharp and accelerated increase in new orders in Scotland during May.

“Moreover, the rate of growth surged to the strongest since the series began in January 1998.

“Both the manufacturing and service sectors posted accelerated increases in new business, with manufacturers continuing to lead the expansion.

“Business confidence in Scotland also improved to a new record high midway through the second quarter of the year, with optimism signalled at manufacturers and service providers alike.

“The further easing of COVID-19 restrictions over the coming months was behind confidence in the year ahead outlook.”