Last month saw the strongest rise in employment levels within the East of England for more than 17 years, according to the latest Lloyds Bank Purchasing Mangaers’ Index (PMI) study.

The data on employment in the region was the most positive since the survey began in the mid-1990s while levels of business activity and new orders also rose markedly, although slightly below the rates recorded in January.

The overall Lloyds Bank East of England Business Activity Index, a seasonally-adjusted measure of the combined output of the region’s manufacturing and service sectors, registered 58.1.

Although this latest reading is the lowest in eight months, it still represents the continuation of one of the strongest expansions in activity in the history of the survey.

New orders rose sharply during February, with 42% of the survey panel reporting growth in new work. The pace of expansion slowed for the third straight month, but remained at a historically high level. Anecdotal evidence suggested that the latest rise in order intakes was partly attributed to the introduction of new products.

A rising inflow of new work was the primary reason for the increase workforce numbers in February. The rate of job creation accelerated to a record-high, with one-in-five companies reporting higher staffing levels.

Concurrently, work outstanding rose again in February, signalling ongoing pressure on operating capacity. However, the rate at which backlogs accumulated eased since January and was below the overall UK average.

Input costs rose further in February, with companies commenting on higher staff costs and increased utility bills. The rate of cost inflation eased since the preceding month, but remained above the overall UK average for the second month running.

Output prices also increased during February, as companies passed higher costs on to their clients. The rate of charge inflation eased, however, to the weakest in seven months.

Steve Elsom, area director for SME banking in East Anglia at Lloyds Bank Commercial Banking, said: “Further positive signals come from East of England private sector data in February.

“Although output growth slowed to an eight-month low and new orders rose at a slightly slower pace, this does little to alter the underlying strong growth trend seen in recent months.

“Fuller order books meant that employment levels rose to the greatest extent in the survey’s history, which suggests that the economic upturn is likely to be sustained in the coming months.”