Business activity increases although rate of growth slows to 15-month low
Business activity in the West Midlands increased solidly in November despite the rate of growth easing to a 15-month low, according to a new report.
According to the latest Lloyds Bank Regional Purchasing Managers’ Index (PMI) survey, activity fell to 54.6 in November from 57.2 in October. A reading above 50.0 signifies expansion with a reading below 50 indicating contraction.
Data from November showed that while West Midlands businesses experienced a solid rise in new orders that was above the UK average, the rate of expansion eased to the slowest since July.
Despite weaker activity and slower new order growth, firms continued to take on more staff to manage increased workloads and business requirements. The rate of job creation in November was quicker than in October, which saw a nine-month low.
The data also showed a substantial rise in input costs – including raw materials, salaries rent and other overheads – partly due to higher commodity prices. This caused firms to pass on some of their increased cost burden to customers by upping selling prices for goods and services, with inflation accelerating to the fastest since August 2008.
Glen Wilson, regional director for SME banking in the Midlands at Lloyds Bank Commercial Banking, said: “Business activity growth in the West Midlands was solid in November but firms seem to have lost some momentum, as this is the first time since August 2016 that the rate of growth has been below the UK average.
“Job creation has been strong however, showing that businesses aren’t discouraged by this easing of growth. It’s great to see a boost in employment opportunities for workers in the region.”
Julian Beer, Deputy Vice-Chancellor at Birmingham City University, commented: “Although output is faltering across the region, activity remains locked in positive territory. As Brexit negotiations move into a more technical phase, it will be vital the region’s economic and trade interests are effectively represented.”
