Growth in output in eastern region at 18-month low, Lloyds Bank PMI survey reveals
- Credit: Archant
Growth in private sector output in the eastern region has eased to its slowest pace for a year and a half, according to the latest Lloyds Bank East of England PMI survey.
The figures show weaker growth in output, new orders and employment, but Lloyds says the rates of expansion remain strong compared data for the UK as a whole.
The overall seasonally adjusted Lloyds Bank East of England Business Activity Index fell from 58.6 in November to 55.6 last year, indicating the weakest expansion in private sector output since June 2013.
The rate of output growth slowed both among manufacturers and service providers during the month, with growth in new business also easing to a seven-month low although it it now increased for 25 months in a row.
Staffing levels also increased for the 25th consecutive month in December although, despite remaining the strongest among the 12 surveyed UK regions and nationas, the rate of job creation slowed in line with output and new business during the month.
Meanwhile, private sector companies in the East of England were able to reduce their backlogs of work for the first time in four months in December. This contrasted with the picture observed at the UK level, where outstanding business continued to rise, albeit at a marginal pace.
Continuing the trend observed throughout the past 68 months, input costs increased in December, although the rate of cost inflation eased to a three-month low and remained historically muted.
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In contrast, charge inflationary pressures picked up compared with November to the most pronounced among the 12 UK regions and nations monitored. Output prices continued to increase at both manufacturers and service providers in December, with the sharper rise recorded at the former.
Steve Elsom, area director for SME banking in the East of England for Lloyds Bank Commercial Banking, said: “Towards the end of 2014, firms across the East of England did experience a slight slowdown in activity. However, business leaders should not be disheartened by this as the region still displayed a solid rate of output growth and remained well above the national average.
“Both new business orders and staffing levels rose for the twenty-fifth consecutive month, and from speaking to the firms surveyed, it is clear that strong order books are behind the solid pipeline of activity.
“As we move into the New Year, it is essential that local business owners remain confident about future prospects and think about how they can best grow their businesses as we move through the year.
“Encouragingly, Lloyds Bank recently spoke to more than 1,500 SMEs across the country for our bi-annual Business in Britain report, and over half (53%) of firms in the East of England said they are confident their orders and sales levels will rise over the next six months.
“In addition, 48% anticipated the same rise in profits. This optimism is a clear signal that the local business community is ready for growth and expansion, and firms must continue to pursue all opportunities for development in order to make 2015 another successful year.”