Output has increased in the technology sector

Jeremy Peat said the private sector looked to have "turned the corner" after a disappointing first half of the year.

The Royal Bank of Scotland's chief economist was speaking after the publication of its purchasing managers index business survey data.

It suggested that orders were on the rise in the manufacturing and services sectors in the third quarter of 2003.

It also highlighted sharp increases in output among technology, media and telecoms firms.

Mr Peat said: "The outlook for the Scottish economy is certainly improving.

Government figures

"After another period of disappointment over the first half of this year, the Scottish private sector economy, both manufacturing and services, looks to have turned the corner.

"We now anticipate a phase of sustained growth and see no real impediments to this trend continuing through the fourth quarter of 2003 and into 2004."

Last week government figures revealed that Scotland's exports fell by 2.7% for the second quarter of 2003, while sales shrunk by 21.5% over the last year.