By Daniel Hunter
The combined business activity of the English regions continued to increase strongly in September, according to the latest Lloyds Bank Commercial Banking Regional Purchasing Managers’ Index (PMI) and a similar pattern was seen in Wales, where the rate of growth in activity reached a four-year high.
While the headline index measuring overall business activity across the English regions fell slightly from 61.0 in August to 60.7 in September, it was once again well above the 50.0 ‘no- change’ mark. The index has now shown rising business activity for 11 consecutive months. Although the latest reading signalled a strong rate of expansion, it was slightly slower than the record high seen in August (61.0).
In Wales, the equivalent index for overall business activity rose to 59.2 in September (up from 57.7 in August). This was above the 50.0 no-change value and signalled the strongest output growth rate for four years.
London recorded the strongest output growth in England last month (62.9), followed by the North West (62.3) and the East Midlands (61.0). While the North East remained the weakest performing area in terms of business activity expansion (56.2), the region had still recorded growth for the past five months.
Improvements in domestic business and consumer sentiment were cited as key drivers of greater business activity, and increased volumes of new business were also recorded across all of England and Wales. The strongest rate of growth was seen in London (64.0), with the latest upturn reflecting a marked improvement in levels of new work within the capital’s service sector.
Higher levels of employment were reported by private sector companies across England and Wales in September, with a number of survey respondents noting that rising backlogs of work and greater confidence in the economic outlook had encouraged staff hiring among businesses. The West Midlands saw the strongest rise in employment (55.6), followed by the North West (55.3).
The survey also highlighted increased costs for private sector firms across all of England and Wales, as rising energy bills and staff salaries drove up input prices. As a result, prices charged by manufacturers and service providers across England and Wales continued to rise in September, with inflation the strongest in the East Midlands (54.6) and weakest in London (50.4).
David Oldfield, Managing Director, SME & Mid Markets Banking, Lloyds Banking Group, said: “Businesses across England and Wales have put in a strong performance in recent months, and September’s survey demonstrates that this trend is continuing. Growth continued across England and Wales and there was an impressive rise in levels of new business.
“These figures are a sign of a real building of momentum that we expect to continue into the final quarter of 2013. Companies throughout England and Wales have grown in confidence during the summer, and the latest survey shows that this newfound optimism is translating into results.
“Increasing numbers of businesses are now turning their attention towards recruiting additional staff and ramping up production capacity to meet growing output requirements.”
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