Lloyds Bank England and Wales Regional PMI®: Third quarter starts with rises in business activity and employment
• England sees sustained moderate growth in business activity at start of third quarter
• Wales maintains its recent strong performance thanks to pipeline of new orders
• Yorkshire & Humber and West Midlands remain top-performing regions overall while the North East sees a decrease in business activity
• Employment growth picks up to 18-month high
Business activity increased across England and Wales for the twelfth month in a row in July, rising at a steady pace, according to the latest Lloyds Bank Regional Purchasing Managers’ Index (PMI).
England’s business activity index – a measure that tracks changes in the total output across the manufacturing and service sectors – registered 54.4 in July, little-changed from June’s nine-month low of 54.3. Wales’s business activity index meanwhile read 55.7, outperforming the UK as a whole, despite seeing growth slow slightly since June (55.9).
The Lloyds Bank Regional PMI is based on businesses in the manufacturing and service sectors and is the leading economic health-check of regions across England and Wales. A reading greater than 50 signifies growth in business activity, while a reading below 50 signifies a contraction. The greater the divergence from the 50 mark, the faster the rate of change.
Yorkshire & Humber (58.0) overtook the West Midlands (56.7) to become the fastest growing region in terms of output in July, with the East Midlands (55.9) the third-best performer. The North East (48.6) recorded the only decrease in business activity, ending an 11-month period of growth in the region.
Employment across England and Wales meanwhile rose at the fastest rate in 18 months, supported by a strong flow of new orders placed with businesses.
However, inflationary pressures remained high, with average prices charged for goods and services rising at the fastest rate for three months, as firms passed on higher costs to customers.
Tim Hinton, Managing Director and Head of Mid-Markets and SME Banking, Lloyds Banking Group said:
"Business activity continued to grow at a steady pace in July similar to the previous month’s performance. Job creation improved to show the strongest rise in employment for 18 months, boosted by particularly strong growth in the West Midlands and Yorkshire & Humber. Strong price pressures remain a concern for businesses with costs rising at a faster rate for a second month in a row which is feeding through to higher prices for goods and services.”