Momentum returns to NW economy – PMI
Business activity in the North West regained momentum in March after growth slowed in February, according to the latest Lloyds Bank Regional Purchasing Managers Index (PMI).
The North West PMI increased to 57.5 in March, showing a boost for the region’s business activity after falling to 53.9 in February. A reading above 50 signals growth in activity whereas a reading below signals decline.
The region had the second-fastest increase in business activity last month, coming behind the East of England where the PMI registered at 58.0.
Businesses also enjoyed faster growth of new orders than in February due to greater demand from home and abroad. March saw order books grow in the North West for the eighth month running.
To meet this growing demand, firms continued to take on new staff, which resulted in employment rising in the region for the sixth consecutive month. The pace of job creation remained above the UK average.
Meanwhile, the weakness of the pound and rising commodity prices resulted in costs continuing to rise for firms, although the pace of inflation slowed for the first time since last December.
Many businesses passed on their increasing cost burden in the form of higher prices, with prices rising at one of the fastest rates seen in the last six years.
The Lloyds Bank PMI is the leading economic health-check of UK regions. It’s based on responses from manufacturers and services businesses about the value of goods and services produced during March compared with a month earlier.
Martyn Kendrick, regional director for the North West at Lloyds Bank Commercial Banking said: “The North West economy regained momentum in March to become one of the fastest growing economies in the UK. Growth rates for output and new orders recovered from February’s five-month lows and have once again exceeded the national trend.
“The continued rise in costs will be a worry for local firms, however the easing inflation is reassuring to see. Firms need to ensure inflationary pressures don’t drive them to price-out customers and lose business.”
