There was some mixed news on the Scottish economy last week.

Starting with the positives, the private sector economy north of the Border returned to growth in August, according to a key survey published by Royal Bank of Scotland.

And optimism among Scottish companies about the prospects for increased business activity on a 12-month horizon rose. There were some other indicators which, while probably not pure positives, were certainly less negative than they have been.

The overall pace of decline of new orders experienced by Scotland’s private sector economy eased significantly in August.

And, while the Scottish manufacturing sector continued to contract last month, the rate of decline in its output in August was the least-steep for nearly a year.

With the return to overall expansion in August, the Scottish private sector economy has now recorded expansion in three of the last four months, according to Royal Bank’s growth tracker survey.

However, Royal Bank highlighted the fact that the pace of growth of Scotland’s private sector economy in August was only “marginal”.

The bank’s headline growth tracker index for Scotland – a seasonally adjusted measure of the month-on-month change in the combined output of the manufacturing and services sectors – rose back above the 50 no-change mark with an increase from 48.7 in July to 50.3 in August.

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However, Scotland was placed 10th in the league table of the 12 UK nations and regions in terms of the month-on-month movement in business activity. It recorded the slowest growth of the 10 nations and regions which achieved expansion.

London achieved the fastest growth in private sector business activity in August.

Scotland was placed much higher up the league table which measures the month-on-month change in employment in the 12 UK nations and regions.

However, the news on this metric was not entirely positive because private sector employment in Scotland fell for a third consecutive month in August.

That said, the findings on this front were relatively positive from a Scottish perspective.

Scotland was third out of the 12 UK nations and regions in the employment league table.

Among the 12, only Northern Ireland achieved growth in employment last month, according to the survey.

Among the 11 nations and regions which recorded a fall in employment in August, north-east England was the only one to post a less-steep decline than Scotland.

However, there is still that three consecutive months of decline for Scottish private sector employment. Royal Bank noted that many firms in Scotland which responded to the growth tracker survey had attributed the fall in staffing to increasing labour costs.

Judith Cruickshank, who chairs Royal Bank’s Scotland board, pointed out that “businesses across Scotland experienced a fresh rise in activity in August, which helped to offset a modest reduction in the previous month”.

And Ms Cruickshank added: “Forward-looking indicators suggested a relative improvement in conditions facing firms, with the downturn in new business easing notably, and companies expressing a more optimistic outlook for future activity.”

However, she observed that “companies remained cautious about expanding their workforce numbers”.

The results of a major economic survey by the Federation of Small Businesses, revealed exclusively by The Herald earlier this month, also highlighted challenging conditions.

The FSB’s second Big Small Business Survey north of the Border found that one in five Scottish small businesses has been forced to cut the services offered to customers over the past year.

Guy Hinks, who chairs FSB Scotland, described this situation as a “drag on the national economy” – an astute observation.

The FSB survey showed more than half of Scotland’s small and medium-sized enterprises planned to expand over the next two years.

However, 42.8% of those which said they were not planning to grow are instead planning to close, downsize, or sell their business.

Mr Hinks observed: “Frustratingly, the struggle to find appropriately skilled staff is holding many back. The scale of the issue means it is not just a problem for individual firms, but it is also a drag on the national economy.”

He added: “The reasons for these staff shortages are many and varied, but include an absence of available local workers in some parts of the country. We are also seeing a shortage of particular skills, including digital, AI (artificial intelligence) and marketing.”

The FSB is calling for “extra support to remove some of the barriers small firms face when taking on apprentices to help tackle skills shortages”.

It also highlighted its support for the “introduction of a rural visa pilot scheme to help increase the pool of workers in places like the Highlands and Islands”.

The Scottish Government’s proposal in 2022 for a rural visa pilot, developed in collaboration with local councils and business organisations, was rejected by the then Conservative government at Westminster.

And Labour has made it plain since it came to power that it will not be embracing this idea from the Scottish Government.

The refusal of the UK Government, which is responsible for immigration policy, to consider this rural visa pilot proposal is lamentable given the skills shortages being felt particularly acutely in some areas.

In a general sense, the labour and skills shortages arising from the UK’s hard exit from the European Union, with the loss of free movement of people between the country and the European Economic Area, remain demoralising. And even more so given how tough things are out there.