The latest Royal Bank of Scotland Regional Growth Tracker has signalled a “notable uplift in confidence” regarding future output.

When asked about their expectations for activity over the year ahead, Scottish private sector companies were “strongly optimistic” in November.

The upbeat forecasts were often underpinned by plans of introducing new products and services and hopes of improved overall demand conditions.

The headline tracker – a seasonally adjusted index that measures the month-on-month change in the combined output of the manufacturing and service sectors – posted 48.0 in November, down from 49.0 in October.

Anecdotal evidence indicated that lower amounts of new orders and economic uncertainty had driven the latest reduction in output.

Judith Cruickshank, Scotland Board Chair, Royal Bank of Scotland, said: “Our Growth Tracker data shows Scottish businesses continue to face challenges, as output and new orders both continued to contract in November and selling prices rise slower than input prices as businesses try to remain competitive in a challenging demand climate.

“Firms also reduced staffing, although to a lower extent than the UK-wide trend suggesting that the Scottish labour market remains relatively resilient.

“Business confidence, however, improved notably offering a reason to approach the coming year with cautious optimism.”

The latest survey results highlighted a 14th consecutive monthly reduction in new orders placed with companies based in Scotland.

“The rate of contraction was more pronounced than that seen in October, as well as stronger than the UK-wide average,” said the report.

“According to panel members, reduced client spending and uncertain economic conditions resulted in fewer sales.”