East Anglia: Lloyds Bank Commercial Banking PMI report reveals further strong growth for region’s firms
06:00 13 January 2014
Companies in the East of England again reported strong growth in output and new orders during December, according to the latest Lloyds Bank Commercial Banking PMI report.
Employment levels also continued to rise and output charges increased at the second-sharpest rate since June 2011 as firms felt able to pass on some cost increases.
The headline Lloyds Bank Commercial Banking East of England Business Activity Index, a seasonally adjusted index that measures the combined output of the region’s manufacturing and service sectors, signalled a further sharp rise in activity at East of England companies.
Any reading above 50 represents growth and, at 59.7, the latest reading was broadly unchanged from November’s 59.8 and among the highest in the series history.
Order book volumes continued to rise in December. The rate of expansion eased slightly since November, but remained above the overall UK average and was among the sharpest recorded in the survey history.
Firms reported that the latest rise in new orders was mainly domestically driven, reflecting greater confidence about the economic outlook. Furthermore, improved marketing had also contributed to the expansion.
Employment levels rose further in December, with 17% of companies hiring additional workers over the month. Despite easing since November, the latest rate of job creation remained well above the long-run series average, with higher workloads the main driver of the latest rise in staffing levels.
Backlogs of work accumulated for a sixth straight month during December with sector data suggesting that the rise was centred around the services economy.
Rising cost burdens persisted into December, as companies faced higher energy costs and increased prices for some raw materials. The overall rate of cost inflation eased, however, to the weakest in three months.
In response to higher input costs, East of England companies raised their charges in December. Charge inflation in the region was higher than across the UK as a whole, although down marginally since the previous survey period.
Steve Elsom, area director for SME banking in East Anglia at Lloyds Bank Commercial Banking, said: “December’s survey provided encouraging news for the East of England economy, with activity rising at a level similar to October’s record high.
“New orders also continued to increase strongly, although at a slightly weaker level than in November. However, with workforce numbers increasing further, there is little reason to doubt that the strong economic upturn will be maintained into the New Year.”