East of England the UK’s top performer in July, Lloyds Bank PMI survey reveals

Steve Elsom of Lloyds Bank Commercial Banking.

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

Private sector employers in the East of England continued to create jobs last month, despite the uncertainty following June’s vote for Britain to leave the European Union.

The latest Lloyds Bank PMI report shows the East to have been the UK’s top performer during July, with the overall index of business activity remaining in positive territory at 51.0.

This was sharply down on June’s reading of 54.5 but still comfortably above the threshold of 50.0, any figure above which represents growth, and well ahead of the national figure of 47.5, which indicates that the UK economy as a whole contracted during the month.

It is the 44th consecutive month that output in the East of England has increased, according the survey, although the rate of expansion was the weakest since March 2013.

Employers in both services and manufacturing within the region again reported a net increase in jobs although a fall in client confidence following the vote for “Brexit” saw new business orders stall, with the overall level of activity supported by the clearing of backlogs.

The weakening in the value of the pound following the referendum result put greater pressure on company costs during July, with the region seeing its steepest increase in input cost inflation for more than three-and-a-half years.

Increased staff costs also contributed to the rise, alongside unfavourable exchange rate conditions adding to the cost of imported supplies.

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Steve Elsom, regional director for the East of England at Lloyds Bank Commercial Banking, said: “Businesses in the East of England fared better than other regions in July, bucking the general downward trend by continuing to create new jobs.

“A slowdown in new business orders is most likely due to companies putting growth plans on hold until post-referendum uncertainty eases. The upturn in job creation suggests that firms expect this to be sooner rather than later, and that demand will pick up in the near-term.”

The Lloyds Bank PMI (Purchasing Managers’ Index) is a leading economic health-check of UK regions. It is based on responses from manufacturers and services businesses about the value of goods and services produced compared with a month earlier.