Business activity in East acclerated during June, Lloyds PMI survey reveals

Steve Elsom of Lloyds Bank Commercial Banking.

Steve Elsom of Lloyds Bank Commercial Banking. - Credit: Archant

Business activity in the East of Engalnd accelerated further during June, supported by strong growth in new business, according to a new report.

The Lloyds Bank East of England Business Activity Index rose to 59.0 last month, up from 57.8 in May, the latest Lloyds Bank Commercial Banking East of England PMI survey shows.

Companies responded to an increase in new business by raising staffing levels at a rate that outpaced the UK average while, on the price front, input cost inflation reached a seven-month high.

Total private sector output in the region expanded at its strongest pace since last September, with both manufacturers and service providers reporting growth.

Incoming new orders grew at their fastest rate for seven months, again outstripping the UK average, with respondents mentioningstronger demand, new contract wins and improved market confidence.

The increase in employment was also spread acorss both manufacturing and the services sectors.

In contrast to the accumulation seen in May, outstanding business declined in June, although the rate of depletion was only marginal. Work-in-hand decreased in the goods-producing category, whereas a rise was noted at services firms.

Most Read

Input prices rose in June, as has been the case every month for more than six years. Having accelerated since May, the rate of cost inflation was marked and the strongest since last November, with services firms seeing a sharper increase in cost burdens than their manufacturing counterparts.

Average tariffs in the East of England were raised for the third month running in June, although the changed on May was only marginal. The rate of charge inflation was above the series long-run trend and surpassed that seen at the UK level. As with the trend for costs, the rise in selling prices was more pronounced at services firms.

Steve Elsom, area director for SME banking in the East of England for Lloyds Bank Commercial Banking, said: “Growth in the East of England gained momentum at the end of the second quarter, with a robust expansion of new work leading firms to scale up activity again in June.

“Furthermore, rates of increase in employment, new business and activity all surpassed their respective UK averages. What’s more, the headline Business Activity Index averaged 58.0 in Q2, its highest quarterly reading since Q3 2014. This indicates that the region is on course to provide a boost to UK GDP growth.”