Output from private sector firms shrank for the 11th month in a row in March but there are hopes the worst of the recession may be over, a survey has said.

The pace at which activity fell was the slowest since last September and could signal that the recession is beginning to bottom out, according to the Royal Bank of Scotland's latest index of purchasing managers.

With the exception of Northern Ireland and the South West, all UK regions saw slower rates of contraction at the end of the first quarter, RBS said.

RBS head of group economics Stuart Porteous added: "March's data provided further evidence that the worst of the downturn - in terms of the speed of decline - may now be behind us."

Despite signs that the UK's headlong plunge into recession may be levelling off, official estimates of UK output due next week are likely to show a first-quarter decline similar to the 1.6% contraction seen in the last three months of 2008.

But Mr Porteous said: "Improvements in many of the regional output series augur well for softer declines in total GDP later in 2009."

Traditional manufacturing centres such as the Midlands, Wales and the North are bearing the heaviest brunt of job cuts during the recession, the survey also showed.

The West Midlands saw private sector jobs cut at the sharpest pace during the first three months of 2009.

All regions covered by the survey were hit by rising unemployment, although Scotland saw job losses increase at the slowest pace, RBS said.

The figures come amid forecasts that official unemployment will soar above three million early next year after recently passing the two million mark as recession bites.