New business hits six-month high

INCOMING business at private sector firms in the North West increased at the sharpest rate since May in December.
 
This supported further expansions in activity and employment during the month. Input prices, meanwhile, rose for the first time in five months, albeit at a slight rate, while selling prices declined.
 
The seasonally adjusted Lloyds Bank North West Business Activity Index posted at 54.4, little-changed from 54.9 in November (the highest in six months), registering a marked expansion in business output at North West private sector firms.
 
This mainly reflected a solid expansion in the service sector. According to panellists, greater new orders led to an increase in activity. However, North West private sector activity growth was weaker than seen across the UK as a whole.

Contributing to activity growth was a further expansion in new business. In fact, new orders increased at the sharpest rate in seven months. Despite this, growth was slower than seen at the UK level. Survey participants mentioned promotional campaigns and new contract wins as factors behind the rise in new work intakes.

Private sector firms hired additional staff in December. However, the rate of job creation was slower than the average observed over the current 32-month sequence of employment growth and weaker than the UK average. Where job creation was recorded, panellists mentioned new business developments.
 
Volumes of business outstanding were depleted for the fourth month running. The rate of decline was broadly in line with the average seen over the current spell of depletion.

Commenting on the Lloyds Bank Commercial Banking North West PMI survey, Martyn Kendrick, area director for SME Banking in the North West, Lloyds Bank Commercial Banking, said:  “New business for companies in the North West increased at the quickest rate for seven months in December, leading to growth in both activity and employment.

“However, the latest survey data suggests there are still improvements to be made as the rate of increase is lower than the rest of the UK as a whole. Firms continued to reduce their charges amid reports of the strong pound increasing pressure to compete internationally.”