Employment opportunities are being created in the region at the fastest rate for 18 months, according to a report based on the latest Lloyds Bank UK Regional PMI survey. This underlines the overall improvement in economic performance in the South West, with companies seeing growth in both new orders and output levels as well as reporting a recovery in business confidence. For the fuller picture please read the article below which appeared in the Western Morning News today.
Roger Mundy, Managing Director, Beardsley Theobalds. 24th August 2017
Jobs being created in South West at fastest rate for 18 months – report
Jobs are being created in the South West at the fastest rate for 18 months, according to a new report.
The latest Lloyds Bank UK Regional PMI survey revealed employment rose in July 2017 at the fastest rate since January 2016.
The increase in job creation underlined an overall improvement in the region’s economic performance, with firms seeing growth in new business orders and output levels.
There was also a recovery in business confidence from an 11-month low in June.
Inflationary pressures remained high, with prices charged for goods and services rising at the fastest rate for three months. Private sector employment in the South West increased for the 13th month in a row in July. Workforce numbers expanded across both manufacturing and services, with the former recording the steeper rate of increase.
The rate of job creation was even slightly stronger than the UK average.
A number of companies reported taking on additional workers to support business growth.
There were also several mentions of more sales staff being recruited.
The South West PMI rose to 54 in July, up from 52.6 in June. A reading greater than 50 signifies growth in business activity, whereas below 50 indicates a decline.
However, data for July also showed another rise in input costs – including raw materials, salaries, rent and other overheads.
Reports from survey respondents highlighted the exchange rate and staff pay as being the main factors. One-quarter of firms noted a rise in costs, versus only three percent that recorded a reduction.
Firms passed on some of their cost burden to customers by upping selling prices for goods and services.
The rise in input prices was well above the historical series average and average prices charged for goods and services increased at the steepest rate in three months, and one that was the third-fastest of all 12 UK regions monitored.
Higher costs was the main driver of the latest rise in prices charged, according to panel member reports, although there were also mentions of stronger demand being a factor.
David Beaumont, regional director for SME banking in the South West at Lloyds Bank commercial banking, said: “The South West economy regained momentum at the start of the second half of the year.
“Businesses were able to create new regional jobs at the fastest rate since January 2016 thanks to increased demand for their goods and services.
“Adding to the positive picture, local firms are now expecting to complete more new work in the year ahead.
“This will likely give the region’s economy a further boost in the months to come; though elevated inflationary costs remain a problem for most.”
The Lloyds Bank PMI, or purchasing managers’ index, is the leading economic health-check of UK regions.
It is based on responses from manufacturers and service providers about the volume of goods and services produced during July compared with a month earlier.