Output growth moderates but West Midlands remains above UK average

OUTPUT growth across the West Midlands moderated during November from a five-month high in October but still remains positive, according to a new growth report.

The latest Lloyds Bank Commercial Banking West Midlands PMI report said the region had seen continued growth in business activity during November and the West Midlands economy remained above the UK average.

New business continued to rise at a marked pace, while backlogs of work increased further. Employment growth was maintained but there were slight falls in input and output prices, the report adds.

The Lloyds Bank West Midlands Business Activity Index – which measures the combined output of the region’s manufacturing and service sectors – posted 58.8 in November. This was down from October’s five-month high of 59.8, but the bank said the latest reading nevertheless remained much stronger than the survey’s long-run average. Output increased in both the manufacturing and service sectors, with the latter seeing the faster growth.

Authors of the report claim the higher activity reflected a further rise in new business received by private sector firms. The latest increase in new work was the sharpest for three months and slightly stronger than the UK-wide trend.

Employment in the West Midlands’ private sector continued to rise in November, extending the current period of expansion to 23 months, said the bank. The rate of jobs growth was marked, having quickened slightly since October.  

Outstanding business levels at private sector firms increased for a sixth consecutive month in November, although the rate of growth eased to a modest pace that was the slowest since August.   

Input prices in the private sector fell slightly in November – the first time in 28 months. That said, the rate of decline was marginal.

Output prices decreased for the second month running, amid reports from panellists suggested strong competitive pressures. However, the rate of decline in charges was moderate, having eased slightly since October.         

Commenting on the PMI  survey, Mark Cadwallader, area director for SME Banking in the Midlands, Lloyds Bank Commercial Banking, said: “The West Midlands continued to see strong output growth above the UK average in November, with the service sector remaining the main driver.

“Job creation correspondingly remained robust, showing that firms remain confident in their business outlook. A sixth successive rise in backlogs of work also indicates that activity growth will be sustained in the coming months.”