Latest Lloyds Bank Regional PMI report shows an acceleration of business activity in the region with the PMI registered at 55.7 in September, which was higher than the UK average of 54.1. Tony McDonough reports
Businesses across the North West saw a rise in new orders in the three months to the end of September and outperformed other UK regions, new data shows.
However the weakness of sterling and the high cost of labour is pushing up prices for customers.
The latest Lloyds Bank Regional PMI report shows an acceleration of business activity in the region with the PMI registered at 55.7 in September, which was higher than the UK average of 54.1 and above August’s reading of 55.1.
A reading above 50 shows growth in output, whereas a reading below indicates decline.
Compared to neighbouring regions, the pace of output growth in the North West was faster than what was seen in the North East and the West Midlands.
Firms continued to build capacity to satisfy growing new orders, although the pace of job creation in the region slowed to an 11-month low.
Business confidence remained positive in September with new product launches and company expansions planned by firms, although optimism dropped below average UK levels.
Meanwhile, the cost of labour and weakness of the pound resulted in higher input costs for firms. These increased cost burdens were partly passed on to clients through higher prices charged for goods and services.
Martyn Kendrick, regional director for the North West at Lloyds Bank Commercial Banking, said: “Momentum in the North West private sector continued at the end of the third quarter, with further solid increases in business activity and new orders.
“However, the rate of jobs growth dipped to an 11-month low, while business confidence was among the lowest in its history.
“Behind the downward trend undoubtedly lies inflation, with both input and output price inflation at five-month highs in September.”