Output expands at fastest rate since January 2012
OUTPUT growth in the North West private sector picked up pace in May, backed by a sharp rise in new orders, according to the Lloyds TSB North West PMI data.
Subsequently, firms hired additional staff. On the price front, input cost inflation eased to the weakest in nine months, whereas output charges were little-changed from April.
The seasonally adjusted index, which measures the combined output of the region’s manufacturing and service sectors, rose from 50.6 in April to 55.1, indicating a solid increase in output. Moreover, the rate of expansion was the quickest since January 2012, and faster than the UK average.
New orders placed at private sector companies in the North West increased sharply in May, and at a rate that was the fastest in 26 months. Anecdotal evidence suggested that demand was stronger and market conditions had improved. At the UK level, new order growth accelerated to the sharpest in over three years.
Employment levels across the North West private sector rose for the first time in three months during May, albeit marginally. Manufacturers reported higher payroll numbers, citing anticipated rises in demand. In contrast, services companies signalled lower staffing levels and commented on voluntary redundancy plans and attempts to reduce costs.
Paul Smith, area director for Lloyds TSB Commercial Banking in the North West, said: ”New work orders increased strongly, indicating that output and employment growth may be sustained in coming months. The encouraging news continued with cost inflation decreasing further, which should strengthen operating profits across the region.”
