New Lloyds Bank PMI report reveals strong growth for East of England firms during October
- Credit: Archant
Businesses in the East of England saw a sharp upturn in growth last month, according to the latest regional Purchasing Managers Index (PMI) from Lloyds Bank.
New export orders were a key driver behind the upturn in activity, with an increase in employment underlying the strong performance.
The East of England PMI, in which any reading above 50 represents growth, jumped from September’s reading of 55.5 to 57.3 in October – its highest for six months and well above the average of 55.8 for the UK as a whole.
Growth in incoming business accelerated compared with September, helped by an increase in orders from overseas and an upturn in new projects.
The level of outstanding business also increased slightly, but still by enough to take it to a five-month high.
Job creation in the region was its most pronounced since September 2016, with growth seen in both the services and manufacturing sectors in response to increased output requirements.
However, rising raw material prices continued to put pressure on firms, with input cost inflation remaining well above the historical average despite easing to a three-month low.
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This caused firms to pass on their increased operation costs to customers by lifting selling prices for both goods and services, and at a faster pace than the previous month. This extended the sequence of increasing output prices in the region to 21 months, with the rate of increase reaching its highest for eight months.
Steve Elsom, regional director for the East of England at Lloyds Bank Commercial Banking, said: “It’s encouraging to see the local economy regain its growth momentum at the start of the fourth quarter.
“Businesses have a lot to be optimistic about as increased growth in output, employment and new business all paint a positive picture for the region.
“However, even though cost inflation began to ease, it’s still a concern for many businesses in the East of England, and the UK as a whole.”
Lloyds Bank’s PMI reports are based on responses from a cross-section of businesses on the volume of goods and services produced compared with a month earlier and are seen as a leading economic health-check of the UK regions and nations.