Business activity in the East of England companies continued to expand during June, with the pace of growth accelerating from the previous month, according to a the latest Lloyds Bank East of England PMI report.

Hiring continued to increase during the month, with the pace of payroll expansion the quickest in the survey’s history, and the rate of input cost inflation eased to the slowest pace since August 2013.

Output in the region grew sharply during the month, as indicated by the headline Lloyds Bank East of England Business Activity Index ? a seasonally adjusted index that measures the combined output of the region’s manufacturing and service sectors ? registering comfortably above the 50.0 no-change threshold.

The headline index registered 58.9, up slightly from May’s 58.6 and indicative of solid output growth. Panellists pointed to a greater level of new contract wins as the main force in driving the expansion.

New business continued to grow at a strong pace in June, extending the current sequence of growth to 19 months. The rate of growth in new orders was sharp overall, with survey respondents citing increased demand related to construction projects and greater exports as the main factors behind the rise.

June data signalled a sustained rise in employment at East of England private sector firms, with the rate of job creation the quickest in survey history. Just under 28% of respondents indicated higher staffing levels with firms commenting on stronger business conditions as the primary factor in the increase.

Data also indicated that backlogs of work lengthened for the first time in three-months, although the rate of increase was slight overall and well below the pace of increase across the UK as a whole.

Input prices in the East of England private sector continued to rise during June, but at the slowest pace since August 2013. Where rising average cost burdens were reported, higher prices for some raw materials was cited as the main factor.

Firms increased their output prices at a faster pace than in May as they sought to protect their margins from the higher cost of raw materials.

Simon Kidney, senior manager for SME banking in the East of England for Lloyds Bank Commercial Banking, said: “Following May’s steady rise in activity, June has been another successful month for the East Anglian business community. With activity and output growing at an even faster rate than displayed in previous reports and new business orders rising for the nineteenth consecutive month, it is clear that the area is enjoying a sustained period of growth.

“A number of firms indicated that exporting was one of the key driving factors behind the increased demand in June, suggesting that this will be an important area of growth for businesses moving forward. Taking advantage of opportunities to establish or enhance an overseas presence is a great way for firms to develop and there are several organisations, like UK Trade & Investment and the British Chamber of Commerce, which have a range of support services dedicated to helping firms trade abroad.

“Another key result from this month’s report is the rate of employment across East Anglia, which increased at the fastest rate in the history of the survey. Firms made a significant number of hires in June, most likely to meet an influx of orders from increased demand and better service for new clients. However, while these new workers may have initially have been recruited to serve a more immediate need, there is also a strong suggestion that firms are bolstering their teams in anticipation of further growth over the coming months.

“Indeed, this buoyancy is echoed in the latest Lloyds Bank Business in Britain report. The bi-annual survey, which monitors confidence levels and firms’ expectations for the next six months, revealed that almost a third of businesses in East Anglia said they expect to increase their staff levels over the second half of the year.

“This, combined with a 10 point increase in overall business confidence in East Anglia, paints a very positive picture for the future of businesses in the area – something that all business leaders should look to capitalise on as they explore ways to grow.”

Steve Elsom, area director for SME banking in the East of England for Lloyds Bank Commercial Banking, added: “Private sector firms across the East of England increased employment levels at a record pace in June, as they looked to meet higher demand and greater increases in output levels.

“With a robust pipeline of new work and input costs rising at their weakest since August 2013, the strong performance in the East of England private sector looks set to continue into the second half of this year.”