Scottish manufacturers experienced growth in August according to the Bank of Scotland’s latest Purchasing Managers’ Index.
The report shows the manufacturing sector had the fastest increase in employment in six months.
New business increased at a much slower rate, while a lack of pricing power led businesses to reduce output prices.
Manufacturers recorded a further increase in overall new orders, although did see a fall in export sales.
The level of outstanding business at companies in Scotland meanwhile decreased for the fourth straight month. As has been the case throughout the current sequence of depletion, however, the rate of decline was only marginal.
August’s survey showed a lack of pricing power among Scottish businesses, with output charges reduced for the first time in more than a year-and-a-half, albeit only marginally.
In contrast, average costs increased at a solid rate that was unchanged from July, with higher staff pay reportedly the primary factor leading expenses to rise.
Donald MacRae, chief economist at the bank, said: “August saw a broad-based rise in business activity across both the services and manufacturing sectors, confirming continuing high levels of business confidence.
“The Scottish economy continues to recover and grow in the second half of 2014.”