Activity levels among South West firms rose last month, although the rate of expansion due to new business slowed, new figures show.
The latest Lloyds TSB South West Business Activity/PMI Index survey, which tracks factors such as output, new orders, employment and prices, shows October’s rate of growth was solid, and stronger than that indicated in September.
The combined output of the region’s manufacturing and service sectors rose from 52.2 to 53.7 on the index.
While employment levels rose, the overall increase was only fractional with new jobs created largely in the manufacturing sector and service sector firms axing jobs.
The increase in new business during October extended the sequence of sustained growth to just over two years, although the rate of expansion slowed to a five-month low, due to softening economic conditions, the report says.
Output by South West firms increased at a ‘solid and accelerated’ rate with only two other UK regions achieving sharper growth of activity.
On the downside, the level of outstanding business declined again in October, and at the sharpest rate since May 2009, and there was also a marked increase in input costs in October, driven by higher raw material prices and wage bills.
While cost inflation remained above the historical average, it slowed to the weakest since October 2010.
Lloyds TSB Commercial area director said: “The South West private sector saw a sharper output expansion in October. However, new business growth slowed to a marginal pace, suggesting that the increase in activity may weaken if new work intakes are not revived.
“This was further highlighted by the sharp reduction in backlogs of work in the region, and job creation slowing to a fractional rate.”
