Export sales offered some economic cheer in October

The Royal Bank of Scotland's (RBS) Purchasing Managers' Index (PMI) showed output growth picked up from September's poor showing.

However, the PMI also showed a dip in employment growth and soaring output costs.

RBS chief economist Jeremy Peat said volatile oil prices were a concern.

The most notable feature of the manufacturing revival was the sharp improvement in new export orders Jeremy Peat RBS economist

Mr Peat said: "The Scottish private sector enjoyed some 'bounce-back' in October, with growth picking up from September's 14-month low.

"This was particularly evident in the manufacturing sector. Manufacturing output growth is still down on levels seen earlier in the year, but markedly stronger than the previous month's disappointing performance.

"The most notable feature of the manufacturing revival was the sharp improvement in new export orders."

Mr Peat said sterling's recent depreciation against the euro would have helped boost export figures.

"Service sector expansion, meanwhile, remained robust with firms reporting higher activity and a positive picture on new orders," he said.

'Patchy growth'

On a negative note, the service sector saw a "negligible" rise in jobs, while employment in manufacturing declined marginally.

"For the revival to become a sustainable trend, Scotland's manufacturers will require growing markets in which they can compete as well as enhanced competitiveness," Mr Peat said.

"In this context, a further tempering of global oil prices would be most welcome - particularly as the survey showed manufacturing input prices rising in October at their sharpest recorded rate, adding again to margin squeeze.

"If that continued oil price tempering does not materialise, or if oil prices prove volatile for a while yet, then Scotland's export-geared manufacturing sector could exhibit patchy growth in the months ahead."