Brexit vote threatening to completely de-rail West Midlands economy

LATEST figures have suggested the West Midlands economy was in danger of hitting the buffers even before the vote to leave the EU threatened to de-rail it altogether.

The latest Lloyds Bank Commercial Banking West Midlands PMI report for June suggests business activity in the region’s private sector economy during June may have started to pick up.

However, the rate of growth had eased to its slowest in 38 months – largely on the backdrop of uncertainty posed by the EU referendum.

While new business came in, backlogs continued to fall, with the latest drop being the most marked since January 2013. Input prices rose at a faster pace, while prices charged increased for the first time in six months.   

The Lloyds Bank West Midlands Business Activity Index – which measures the combined output of the region’s manufacturing and service sectors – posted 51.9 in June. Down from 52.5 in May, the index pointed to an easing in the rate of expansion to a modest pace that was weaker than the UK average.

June’s data signalled a rise in new business at West Midlands private sector firms, following a broadly flat May. However, the rate of growth in new work was modest and below the UK average.

Commenting, Mark Cadwallader, regional director, SME banking, West Midlands, Lloyds Bank Commercial Banking, said: “The West Midlands lost further growth momentum in June amid rising economic uncertainty around the EU referendum vote.

“A slowdown in the region’s manufacturing sector was the driver, only partially offset by a pick-up in service sector growth. Job creation quickened from May’s 26-month low, but may falter again if activity growth slows further in the third quarter.”