West Midlands shows return to growth in August

FIRMS in the West Midlands experienced the fastest rate of business activity growth in three months during August, according to new figures.

The latest Lloyds Bank Regional PMI shows the region registered a rate of 52.4 in August, up from 47.4 in July following the Brexit shockwave. A reading of more than 50 signifies growth, and the latest index reading points to the fastest rate of expansion for the region in the three months.
 
Firms in the region saw an increase in new business during the month, however local order book growth remained slower than the national average. Some jobs were created off the back of this increase, but employment growth was marginal compared to previous months.
 
The Lloyds Bank PMI is considered one of the leading bellweathers to check on economic growth.

It is based on responses from manufacturers and services businesses about the value of goods and services produced during August compared with a month earlier.
 
Input prices – which include staff wages, raw materials and other overheads – continued to rise for the fifth consecutive month, and as a result West Midlands firms marked-up the price of their products and services. However, this increase in output prices weighed on businesses’ order book growth.
 
Mark Cadwallader, regional director for SME banking in the West Midlands, Lloyds Bank Commercial Banking, said: “West Midlands firms saw a rebound in activity during August after the dip seen in July following the EU referendum vote.
 
“The number of new orders coming in to businesses picked up, resulting in higher output levels. However, employment growth slowed to its weakest rate in over three-and-a-half years, while input price inflation picked-up as the weaker pound took its toll.”