Scotland's private sector economy is "approaching stabilisation" after the coronavirus lockdown, according to a survey.
The latest Royal Bank of Scotland purchasing managers index (PMI) found the coronavirus-related downturn "eased noticeably" in July.
However, there are fears that local lockdowns could delay recovery.
Business confidence strengthened to a five-month high despite firms reporting a reduction in new business in July,
The report's Business Activity Index - a measure of combined manufacturing and service sector output - registered 49.3 in July, up from 37.1 in June.
It also found the softest fall in private sector output since March.
'Significant step in the right direction'
The optimism is linked to hopes of an economic recovery once lockdown measures are lifted, the report suggested.
However, the PMI report showed a reduction in Scottish private sector employment for the sixth month in a row.
Malcolm Buchanan, chairman of the Scotland board at Royal Bank of Scotland, said the latest data showed some encouraging signs.
But he warned that while July's figures "are a significant step in the right direction, we are still yet to see growth".
He added: "A possible 'second wave' of the pandemic and reintroduction of lockdown measures in regions such as Aberdeen has the potential to derail any further moves towards a recovery."