Both Scotland's manufacturing and service sectors are taking on more workers as the economy strengthens, a new report says.

The Bank of Scotland said manufacturing, output in May rose for the fourth month running, and service sector activity rose for the seventh consecutive month.

Manufacturing exports rose for the third month in a row, with rising demand from the USA and Europe according to the bank's monthly survey of the Scottish economy.

The bank's group economist, Martin Ellis, said the findings were further evidence of a sustained economic recovery from the weaknesses of late last year.

The service sector is said to be performing well

Mr Ellis said: "The increase in the pace of growth seen in both manufacturing and service sectors in May is indicative of the evenly-balanced nature of the upturn, and augurs well for growth prospects in the second half of this year.

"Moreover, the first upturn in manufacturing employment for 15 months is particularly welcome."

In the service sector, May saw an increase in activity for the seventh month running, with a "modest" increase on the April level.

The bank said the service sector has now had 40 consecutive months of rising employment, with one in six service sector employers taking on more staff.

It said that in manufacturing, the recovery from last year's downturn continued, with the output growth rate at its highest for nearly two years.

Cost pressure

The bank also reported that manufacturing employment rose for the first time in 15 months.

However, both sectors have seen growth accompanied by rising cost pressures.

Higher fuel and labour costs were felt in the service sector, where competition constrained the ability of firms to impose price rises.

And in manufacturing, employers' costs rose for the second successive month, through inflation at its highest for 11 months, mainly due to oil prices.