Lloyds Bank PMI survey shows East of England economy still in growth despite further slowdown

Steve Elsom of Lloyds Bank.

Steve Elsom of Lloyds Bank. - Credit: Archant

Business activity in the East of England increased during February but a slow-down in the rate of growth seen during January continued last month, according the latest Lloyds Bank regional PMI report.

The East of England Purchasing Managers Index (PMI), in which any reading above 50 represents growth, fell to 54.2 in February from 56.4 in January, which itself marked a decline from 59.8 in December.

Last month’s data showed that a slower increase in new work received by firms contributed to a weaker rise in employment and the slowest expansion in private sector output for six months.

Meanwhile, weaker sterling continued to have an effect on businesses as average input prices, such as raw materials and salaries, rose sharply. This drove many businesses to pass on part of their higher cost burden to customers in the form of raised prices for goods and services.

Steve Elsom, regional director for the East of England at Lloyds Bank Commercial Banking, said: “As seen in many parts of the UK, economic growth in the East of England slowed in February. Cost pressures also continued to intensify, which in turn led to another steep rise in prices charged for goods and services.

“On a positive note, companies in the region are more optimistic than they were in January about growth prospects in the year ahead.”

The Lloyds Bank Regional PMI is a leading economic “health-check” of UK regions. It is based on responses from manufacturers and services businesses about the volume of goods and services produced during the past month compared with a month earlier.