OVERALL business activity and the level of new incoming business increased among companies in the East of England during December, according to the latest Lloyds TSB Purchasing Managers’ Index.

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Work in-hand continued to decline, but employment levels grew for the first time in four months, the survey found.

The rate of input cost inflation accelerated to reach its highest level in nine months while output prices rose for the second successive survey period.

Following a decline in November, business activity in the region grew in December for the fourth time in five months and in contrast to a slow-down in activity across the UK as a whole. Sector data suggested that the latest increase was mainly driven by companies in the services sector.

According to anecdotal evidence, the increase in new business placed with companies in the East of England was partly driven by new contracts and greater numbers of new clients.

While staffing levels decreased slightly in the UK as a whole, employment levels in the East of England private sector increased for the first time in four months, although the rate of job creation was only marginal. Higher demand was given as one of the reasons behind the latest rise.

Outstanding business continued to deteriorate during December, but at the slowest pace in nine months. Sector data suggested that the overall decline was driven by lower backlogs of manufacturing firms.

December data signalled a further increase in input costs at private sector companies. The rate of input price inflation accelerated to the highest level in nine months and was higher than that observed at UK level.

Average tariffs set by East of England private sector firms rose during December. The latest reading marked the second consecutive increase and stayed in line with the UK average. Increased input costs were commented on by panellists that reported a rise in output prices. Higher tariffs were reported in both the manufacturing and service sectors during December.

Steve Elsom, area director for Lloyds TSB Commercial in East Anglia, said: “Companies across the East of England returned to growth during December, after struggling to increase business activity in November. This was in contrast to the output slowdown recorded nationally.

“The level of new business seen by companies in the East of England also increased, again in contrast to broadly unchanged levels across the UK as a whole.

“Higher demand led to a slight rise in employment levels during December, which was the first increase in workforce numbers seen since August in the region. However, the rate of input cost inflation accelerated and reached its highest level for nine months.”

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