Survey data suggests region is on right track

SURVEY data has indicated continued growth for the region’s economy with rising orders and job creation.

The Business Trends Survey from accountants BDO reveals that manufacturers are particularly bullish, while the Lloyds Bank North West PMI study says private sector job creation was at its highest level since 1997 in April,

BDO said manufacturers’ growth prospects for the rest of 2014 strengthened in April and are now at higher levels than firms in the service sector.

BDO’s Manufacturing Optimism sub-Index jumped to 120.8, up from 119.4 last month, as growth in the Eurozone helped boost export orders.

The performance among manufacturers has driven the overall Optimism Index up to 104.3, the highest rating ever in the index’s 22 year history.

On a more cautionary note, BDO’s Inflation Index moved a point higher over April to reach 98.1, indicating that businesses are preparing themselves for upward pressure on prices.

Tim Entwistle, partner and head of BDO in the North West, said: “High growth expectations among manufacturers is a key highlight of this phase of the recovery, with a stronger manufacturing sector set to benefit the region in the long term by rebalancing our economy away from London and the City.

“However, manufacturing is still some way off its pre-crisis peak and confidence in the sector has proved to be volatile in the recent past, impacting negatively on investment and hiring decisions.”

Meanwhile PMI data echoed the positive picture it recorded higher orders, production and employment activity.

Private sector employment increased at a sharp rate that was the quickest since data collection began in 1997. According to participants, workforce numbers increased as part of efforts to clear backlogs and meet higher production requirements.

Paul Smith, area director SME Banking in the North West at Lloyds said: “Companies in the North West started the second quarter of the year on an encouraging footing.

“Output growth reached a three-month high on the back of a further robust increase in workloads. Employment also rose at its strongest in the history of the survey, suggesting that firms expect the strong momentum seen since last summer to be sustained in upcoming months.”