New business growth slowed in May as uncertainty infects decision-making

UNCERTAINTY continued to affect business activity last month as output growth slipped to a 37-month low.

The manufacturing and service sectors in the West Midlands reported its slowest employment growth in more than two years, according to Lloyds Bank Commercial Banking latest PMI report.

Mark Cadwallader, regional director, SME banking, West Midlands, Lloyds Bank Commercial Banking, said: “Output growth in the West Midlands eased further in May, as new business growth stalled in the face of client uncertainty. Firms responded by slowing hiring, with staffing levels rising at the weakest rate in over two years. In many cases, companies will be awaiting a clearer picture before making major business decisions.”

Underlying the slower pace of expansion was a broad stagnation of new business, the report said, while companies depleted their backlogs of work at an accelerated pace. 

The seasonally adjusted index posted 52.5 in May, down from 52.9 in April, and the lowest since April 2013.

The level of new business received by West Midlands private sector firms remained virtually unchanged in May, following a sustained period of expansion which began in November 2012. There were some reports from the survey panel that clients had placed orders on hold amid increased uncertainty.