BUSINESS activity in the East of England edged ahead last month, according to a new report, but the region suffered its first reduction in employment for more than a year.

The latest Lloyds TSB East of England PMI report, published today, says that activity stabilised during November, following a fall the previous month.

The measure of combined activity within the region’s manufacturing and services sector rose back above the 50.0 “no change” threshold, from 49.1 in October to 50.4 last month, although the expansion was slower than the national average.

An increase in new orders, also reversing the trend of the previous month, has a positive impact on output, although uncertainty over wider economic conditions prevent a stronger rise.

The increase in new business was faster than the national average, with the services sector leading the growth.

However, fragile economic conditions were blamed for the first reduction in employment recorded in the survey for 15 months although the decline in staffing levels was smaller than that for the UK economy as a whole.

Backlogs of work fell for the fifth month in a row in November, and at the fastest pace seen in the region during the sequence of reductions although the rate lagged the decline seen across the country as a whole. Outstanding business fell more quickly among manufacturers than among services companies.

Steven Elsom, area director for Lloyds TSB Commercial in East Anglia, said: “The East of England reversed the declines in output and new orders that were seen in October.

“But fragile economic conditions dampened business confidence in the region, as show by the first reduction in employment since August 2010.

“Unless the current uncertainty in domestic and export markets fades, economic conditions are likely to remain challenging in the months ahead.”