Lloyds Bank

Lloyds TSB England Regional PMIs

08 July 2013

Business activity increases at fastest rate since January 2012

  • Business activity continues to grow in all nine English regions
  • Fastest rise in output in London, followed by the North West
  • Most regions report increased job creation in June, with London seeing most marked rise in private sector employment since August 2007

There was an increase in business activity across all of the English regions in June, according to the latest Lloyds TSB Regional Purchasing Managers’ Index® (PMI®) survey.

At 55.9 during June, up from 54.8 in May, the headline index measuring overall business activity remained well above the 50.0 ‘no-change’ mark and showed the strongest growth since January 2012. The fastest rates of expansion were seen in London (58.3), the North West (58.1) and the West Midlands (56.3). The North East (51.7) remained the weakest performing English region in June.

One of the key economic drivers, levels of new business, also increased in all nine English regions during June. The North West (59.2), the West Midlands (58.9) and London (58.7) were the strongest three regions in terms of new business gains last month. Anecdotal evidence suggested that improving business and consumer confidence, alongside successful product launches, had boosted new order volumes.

Higher levels of business activity and increases in new work encouraged companies to hire additional staff in June. Eight of the nine English regions showed overall increases in new jobs, with the North East the only exception due to a marginal decrease in employment levels (49.2). The West Midlands registered the biggest rise in staffing levels (54.0), followed by London (53.9), as a result of the most marked rise in private sector employment across the capital since August 2007.

Average input costs continued to rise in June, which a number of survey respondents attributed to higher energy bills. Input cost inflation was strongest in the South East (55.2), and weakest in the North East (50.4).

The majority of English regions recorded an increase in companies’ output prices in June, with the North East (47.0) and East of England (49.4) the only exceptions. Companies in London recorded the most marked rise in average prices charged (52.9). Survey respondents suggested that these had been raised to reflect increased cost burdens, but margins remained under pressure amid strong competition for new work in June.

David Oldfield, Managing Director, SME & Mid Markets Banking, Lloyds Banking Group, said:
“Business activity stepped up a gear in June, while increases in new orders and stronger job creation added to the brightening economic picture across the English regions. A sustained period of rising output has spurred private sector job creation over the summer, with London, the North West and the South West all recording the fastest employment growth for over five years. Businesses also reported gains in new work from both domestic and international clients, helped by successful new product launches and signs of stronger economic conditions in key markets.”

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