SCOTLAND’S private sector has seen rapid growth and more jobs created, a new report has shown.

The data, seen in the latest Royal Bank of Scotland PMI (purchasing managers’ index), shows the company’s business activity index – a measure of combined manufacturing and service sector output – rose from 57.5 in July to 58.1 in August, signalling a rise inactivity.

The report also shows an increase in new jobs, with the rates of growth remaining close to May’s results, as companies continue to expand and take on new staff amid reports of stronger sales since Covid restrictions have eased.

August also showed an increase in client demand at Scotland’s private sector firms and, at the sector level, service providers recorded an increase in new business.

The recent data, however, shows that inflation pressures were severe as costs rose at one of the steepest rates on record amid reports of higher material, fuel, transport and wage costs, with manufacturers particularly hard hit.

The rate of inflation slowed from July’s peak but was still the third-quickest on record and rapid overall.

Input prices also rose for the 15th straight month and were at their steepest since January 2011.

Material shortages, price hikes at suppliers, greater fuel and wage costs, Brexit and Covid-19 were all cited by participants in the study as drivers of inflation.

Goods producers continued to record a far steeper rate of increase than services firms during August. Logistical problems and a lack of staff contributed to the latest rise.

Across the 12 monitored UK areas, only London saw a slower pace of input price inflation than Scotland in August. Average charges also rose across the UK as a whole during August. The rate of increase was broadly similar to that in Scotland.

Malcolm Buchanan, chair of the Scotland board at RBS, said: “August data pointed to a further rapid expansion of Scotland’s private sector economy, with the rate of growth re-accelerating from July and outpacing the UK as a whole by a wide margin.

“Services continued to record a faster upturn than manufacturing, although the differential narrowed slightly.

“Inflows of new work increased sharply again, as looser lockdown measures continued to boost client demand and, as a result, firms took on staff for the fifth month running.

“Overall, the latest PMI data signals another strong performance for the Scottish private sector.”