West Midlands companies report strongest rise in new orders in almost two years

WEST Midlands companies reported the strongest rise in new orders in almost two years during December, according to latest figures.

The latest Lloyds Bank UK Regional Purchasing Managers’ Index (PMI) survey shows new opportunities helped stimulate demand at a rate above the UK average.
 
The West Midlands PMI posted 58.7 in December, down slightly from November’s 20-month high of 58.9. However, any reading of above 50 signifies expansion in business activity.
 
The strong growth of business activity is largely attributed to a rise in new business opportunities for firms in the region, and order books were filled at a faster rate than the UK average.

In addition, firms also took on more employees to meet demand
 
However, despite increased demand, the weak pound meant margins were put under further pressure as cost burdens – including staff wages and raw materials – rose at one of the fastest rates seen over the past five-and-a-half years. This in turn led to higher prices charged for goods and services.
 
The Lloyds Bank PMI is considered one of the leading economic health-check of UK regions. It is based on responses from manufacturers and services businesses about the amount of goods and services produced during December compared with the previous month.
 
Mark Cadwallader, regional director for SME banking in the West Midlands, Lloyds Bank Commercial Banking, said: “As increased demand for goods and services in the West Midlands’ created new business opportunities, output growth was stronger in our region than most of the rest of the UK during December.
 
“However, the current inflation trend remains a concern and the weak pound may impact the region’s manufacturers and the cost of production.
 
“It remains to be seen whether underlying demand and the recent trend in new orders can be maintained, as West Midlands firms look to pass on high costs to clients through raised prices in 2017.”