SCOTLAND’S finance secretary Keith Brown has welcomed figures from the Bank of Scotland suggesting Scottish private sector growth had picked up last month, The Regional Purchasing Managers’s Index (PMI) figures for May suggested output had increased by the greatest degree since February.

Services business activity returned to growth and the expansion in manufacturing production remained strong in May, both contributing to the overall upturn, the report says.

In terms of inflation, price pressures eased from recent peaks, although only marginally. Meanwhile, business confidence towards the next 12 months hit a four-month high.

The seasonally adjusted headline PMI — a single-figure measure of the month-on-month change in combined manufacturing and services output — rose to 51.5 in May, from 50.6 in April. The rate of growth signalled remained below the historical series average since January 1998, however.

Prices pressures eased marginally in May, but remained steep overall.

The rates of inflation for both input and output prices signalled in Scotland were above those seen across the UK as a whole. Input price inflation remained strong, despite easing slightly since April.

The bank said they had anecdotal evidence suggesting that rising salaries and high raw material prices added to cost pressures for firms.

They also suggested sentiment towards future growth prospects remained strongly positive in the latest survey. Optimism was broad-based across both the service and manufacturing sectors, albeit slightly higher in the latter.

Panellists attributed confidence to an expected economic upturn.

Fraser Sime, regional director, Bank of Scotland Commercial Banking said: “Latest PMI data signalled the Scottish private sector moving up a gear, as growth reached a three-month high.

“May’s upturn was driven by the service sector returning to expansion for the first time since February.

“In addition, the manufacturing sector remained strong, in line with predictions that the goods-producing sector will drive second quarter growth.

“The positive news was driven by rises in combined output and new orders, fuelled by solid underlying demand. Also, easing price pressures added to the overall improvement in business conditions. That said, Scottish private sector growth remains below that of the UK as a whole.”

Economy Secretary Keith Brown said: “The latest Bank of Scotland PMI figures show a welcome rebound in Scottish service sector business activity in May while manufacturing output remains strong and continues to improve.

Business confidence amongst Scotland’s private sector also picked up in May.

“The statistics come after 2017 EY Scotland Attractiveness Survey confirmed 2016 was a record-breaking year for foreign direct investment, confirming Scotland has been the top UK destination outside London in every one of the past five years, and the Scottish Engineering Quarterly Review showed positive signs for the engineering and manufacturing sector.

“These figures show the Scottish economy remains resilient and we will continue to do all we can to support growth.”

Reports last week suggested growth of the UK’s key services sector had slowed sharply in May after a sluggish start to 2017.