East Anglia: Growth in business activity hit a four-month low in March, says Lloyds TSB Commercial PMI report
- Credit: Archant
GROWTH in business activity in the eastern region slowed to its weakest rate for four months during March, a new survey indicates.
Lower growth rates of incoming new business matched a moderation in output expansion, and the rate of job creation was also the slowest since late last year, according to the latest Lloyds TSB Commercial Banking Purchasing Managers Index report, produced monthly by Markit Economics.
The headline seasonally-adjusted Lloyds TSB East of England Business Activity Index fell to 50.4 in March, still representing growth but down from February’s 52.0.
While output increased for the fourth successive survey period, the latest reading was the weakest in the current sequence of growth. The drop in overall activity growth was driven by contracting output levels in the manufacturing sector.
Levels of incoming new business continued to increase in March, but the pace of expansion slowed and was below the overall UK average. Sector data suggested a solid contraction in new work at manufacturers, while volumes of incoming new orders increased at firms in the service sector.
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East of England companies hired additional staff during March, albeit at the slowest pace in three survey periods. Companies that reported increased payroll numbers often linked this to higher new orders.
Meanwhile, work-in-hand (but not yet completed) decreased for the second month running, and at the sharpest rate in four survey periods. According to anecdotal evidence, an expansion in operating capacity accounted for much of the latest decline in levels of outstanding business.
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Cost burdens in the East of England continued to increase in March. Around 22% of panellists recorded higher input prices and linked this to increased fuel prices and a weak pound. However, cost inflation eased during the latest survey period, and was below the series average.
Companies in the east raised their output charges in March, for the fifth consecutive month. An increase in input costs accounted for much of the latest rise, according to panellists.
Steve Elsom, area director for Lloyds TSB Commercial Banking in East Anglia, said: “Across the East of England both business activity and new order growth came to a near standstill for private sector firms last month.
“The labour market also remained subdued, with employment levels increasing at the slowest pace in three months. Meanwhile, both input costs and the prices charged to customers continued to rise, but rates of inflation decreased from the previous month.”