West Midlands economic output reaches two-year high

The Midlands continues to lead the rest of the UK in terms of regional output growth, latest figures show.

According to the latest Lloyds Bank Regional PMI, growth in the West Midlands accelerated further in April with output increasing at the fastest rate in two years.

The West Midlands PMI recorded 60.3 in April – the strongest nationally – and up from 56.1 in March.

The East Midlands was the second most robust region, with the East Midlands PMI reaching 56.2 last month, compared to 54.8 in the previous month.

East Midlands’ output growth reached a 15-month high, and the rate of new orders growth rose for the third consecutive month.

New orders in the West Midlands grew at their fastest rate since February 2014 and employment levels reached a two-year high.

However, for all of that, export levels from the West Midlands were poor given the vibrancy of the region.

The Midlands Economic Forum said that although inflationary pressures stabilised, price pressures remained tight and there was evidence of producers feeding increased costs through to consumers.

However, confidence about future business prospects remained strong, bolstered by both business activity and new orders, which exceeded current UK averages.

Professor Julian Beer, Deputy Vice-Chancellor at Birmingham City University, said: “The regional PMIs underscore the resilience and vibrancy of the East and West Midlands economies.  Business sentiment regarding future output prospects remain robust, notwithstanding Brexit, and output, new orders and employment growth highlight the strengths of the regional economy.

“Critical will be the policy response adopted to accommodate and sustain this growth after June’s general election, but nevertheless prospects appear extremely favourable.”