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Scottish business activity lost momentum last month as growth in new orders eased, according to a closely-watched survey.

Royal Bank of Scotland's Purchasing Managers Index suggested there was a decline in sales for manufacturers and slower growth in the service sector.

Despite the slowdown in growth, firms continued to expand their workforces.

Respondents linked job creation to company expansion and stronger levels of business activity.

That said, the increase in employment eased to "a slight pace".

The seasonally adjusted PMI for September was 52.2, down from 53.4 in October, signalling the slowest expansion in private sector output since March.

Any figure above 50 suggests growth.

'Pressure on margins'

Expansion in the service sector was attributed to new contract wins, while manufacturers saw workloads impacted by weak underlying demand.

Firms reported increased pressures on profit margins as input costs continued to rise, in part due to a weak pound and increased raw material prices.

In turn, prices were raised to offset the rise.

Despite the loss in momentum, firms indicated that they were more confident towards future growth prospects than in October.

Planned company growth, new marketing strategies and stronger international competitiveness were all cited as reasons underpinning confidence.