Regional economy stronger in March, says survey

NEW data from Lloyds Banking Group indicates the state of the regional economy is improving but the cost of doing business continues to rise.

Its Lloyds TSB North West Business Activity Index – which measures the combined output of the region’s manufacturing and service sectors – shows the strongest rate of monthly output growth since last May.

The index increased to 58.1 in March, up from 56.2 in February.

The bank said manufacturing had driven the figures which reflect stronger gains in new work, output and employment than the UK as a whole.

Leigh Taylor, area director for Lloyds TSB Commercial in the North West, said: “The North West was one of the best performing UK regions in March, with private sector output growth accelerating to its fastest since May 2010 and employment levels rising for the second month running.

“Manufacturing remains the principal driver of expansion, despite a stronger contribution from the service sector in March. On the inflation front, the region saw another rapid increase in input costs at the end of the first quarter, which in turn contributed to the fastest rise in private sector output charges for two-and-a-half years.”

Jobs growth continued in March, but slowed slightly on the month. The bank said anecdotal evidence indicated that staff were hired to meet increased business commitments and accommodate company expansions. Manufacturers took on
new workers at a faster rate than service companies.

Greater energy, fuel, raw material and wage costs underpinned the latest increase in input prices. As a result, firms continued to raise their average tariffs. Data showed that output charge inflation picked up slightly, to reach a two-and-a-half year high in March.