West Midlands business activity slows to a three-year low
BUSINESS activity declined to a three-year low in the West Midlands during April, latest figures have shown.
However, there is growing optimism that the picture will improve during the second half with an increase in new work boosting output.
The latest Lloyds Bank Commercial Banking West Midlands PMI report showed the rate of expansion during April eased to the slowest in the current three-year period of growth. This was in spite of a sharper increase in new business.
Mark Cadwallader, regional director, SME banking, West Midlands, Lloyds Bank Commercial Banking, said: “April’s PMI data signalled that output growth in the West Midlands eased from the stronger pace seen at the start of the year, mirroring the general UK trend.
“However, faster rises in new business and employment offer hope that the slowdown may just be temporary. Indeed, the region continued to outperform the UK average, as has been the case since the start of the year.”
Employment rose further during the month, with the rate of jobs growth quickening to a three-month high. This helped companies make inroads into their backlogs of work, which continued to decline at a marked pace.
Input prices rose for the first time in nine months during April, whereas output charges fell further.
The Lloyds Business Activity Index for the West Midlands, which measures the combined output of the region’s manufacturing and service sectors, registered 52.9 in April, down from March’s 54.0.
This pointed to a further deceleration of output growth from January’s recent peak, albeit still at a faster increase than that seen across the UK as a whole.
The level of new business received by West Midlands private sector firms continued to rise in April, extending the current period of expansion to 42 months. The rate of new order growth was the fastest since January and solid overall.
Employment in the region’s private sector rose further in April. The rate of jobs growth quickened to a three-month high and was solid overall. The region continued to post a faster pace of expansion than the UK average.
Outstanding business in the West Midlands private sector continued to decline in April, reflecting ongoing spare capacity at firms. The rate of contraction was unchanged from the robust pace seen in March.
Input prices in the West Midlands private sector increased for the first time in nine months during April. Although, the rate of cost inflation was moderate overall.
Prices charged by West Midlands private sector companies were reduced further in April, extending the current run of decreases to four months. The latest drop was slightly sharper than in March.
