Lloyds Bank Regional PMI: Pace of economic growth slowed across England and Wales in September 2015

• Business activity growth eases to slowest rate since 2013 in England and Wales
• Job creation continues at solid pace, led by London
• Inflationary pressures remain low as input and output prices rise only slightly

LONDON, 14-10-2015 — /EuropaWire/ — The pace of economic growth slowed across both England and Wales in September, to its weakest level since early-2013, according to the latest Lloyds Bank Regional Purchasing Managers’ Index^® (PMI^®). However, employment levels continued to rise, led by strong job creation in London.

Business activity in the combined manufacturing and service sectors in England rose at its slowest rate since April 2013, with the index registering 53.8, dropping from 55.7 in August. The index, while remaining positive and above the ‘50-no change’ mark has fallen for three months in a row, signalling a sustained loss of growth momentum.

All regions in England recorded weaker business activity growth, the worst performing being the North West where the index dropped to a 33-month low of 50.2. Most regions recorded growth rates that were the slowest since 2013, although for London (55.6) and the East Midlands (55.4), the two best performers, the latest increases were the weakest for just 11 and four months respectively.

The employment index in England rose to 54.9 in September, its highest level for three months, largely on the back of strong job creation in London (57.8).

Wales similarly recorded slower growth in business activity and saw its index drop from 53.9 in August to a 31-month low of 53.0. Wales, meanwhile, recorded its weakest rise in employment since June last year (52.3).

September’s survey continued to show low inflationary pressures, with businesses’ input and output prices both rising only slightly and at rates that were little-changed from August. Lower prices in global commodity markets and fuel reportedly acted to offset rising wages, with the still-strong pound also keeping costs down.

Tim Hinton, Managing Director, Mid Markets and SME Banking, Lloyds Banking Group said:

“Growth remains positive but has continued to slow in September and rounds off the weakest quarter of expansion in over two years. Although employment continues to rise, we may see businesses take a more cautious approach to hiring in the final months of the year.

“Falling global commodity prices are giving businesses some cost relief in the face of rising wages.” 

Compiled by Markit for Lloyds Bank Commercial Banking, this report is based on data compiled from monthly replies to questionnaires sent to purchasing executives in over 1200 private manufacturing and services companies. The panel is carefully selected to accurately replicate the true structure of the private sector economy.

England’s Regional PMI® surveys are based on data compiled in September 2015. Survey responses reflect the change, if any, in the current month compared to the previous month based on data collected mid-month. For each of the indicators the ‘Report’ shows the percentage reporting each response, the net difference between the number of higher/better responses and lower/worse responses, and the ‘diffusion’ index. This index is the sum of the positive responses plus a half of those responding ‘the same’. Diffusion indexes have the properties of leading indicators and are convenient summary measures showing the prevailing direction of change. An index reading above 50 indicates an overall increase in that variable, below 50 an overall decrease. The headline index for the English regions was first compiled in January 2001.

The Wales PMI® features original survey data collected in September 2015 from a representative panel of companies based in Wales and operating in both manufacturing and service sectors. The headline index for Wales was first compiled in January 2001.

The Purchasing Managers’ Index® (PMI® ) survey methodology has developed an outstanding reputation for providing the most up-to-date possible indication of what is really happening in the private sector economy by tracking variables such as sales, employment, inventories and prices. The indices are widely used by businesses, governments and economic analysts in financial institutions to help better understand business conditions and guide corporate and investment strategy. PMI surveys are the first indicators of economic conditions published each month and are therefore available well ahead of comparable data produced by government bodies.

About Lloyds Bank Commercial Banking
Lloyds Bank Commercial Banking provides comprehensive expert financial services to businesses of all sizes, from start-ups, through to small businesses, mid-sized businesses and multinational corporations. These corporate clients range from privately-owned firms to FTSE 100 PLCs, multinational corporations and financial institutions.

Maintaining a network of relationship teams across the UK, as well as internationally, Lloyds Bank Commercial Banking delivers the mix of local understanding and global expertise necessary to provide long-term support and advice to its clients.

Lloyds Bank Commercial Banking offers a broad range of finance beyond just term lending and this spans import and export trade finance, structured and asset finance, securitisation facilities and capital market funding. Its product specialists provide bespoke financial services and solutions including tailored cash management, international trade, treasury and risk management services.

Its heritage means it has an unrivalled understanding of business needs and a proven track record of supporting businesses across the sectors and regions. Taking a relationship approach, it provides support to its clients throughout the economic cycle.

http://www.lloydsbank-commercialbanking.com/

About Markit
Markit is a leading global diversified provider of financial information services. We provide products that enhance transparency, reduce risk and improve operational efficiency. Our customers include banks, hedge funds, asset managers, central banks, regulators, auditors, fund administrators and insurance companies. Founded in 2003, we employ approximately 4,000 people in 11 countries. Markit shares are listed on NASDAQ under the symbol MRKT. For more information, please see www.markit.com

*If you would like to receive information on the Bank of Scotland monthly Scottish Purchasing Managers’ Index® (PMI® ) please contact Zoe Redhead on 0131 655 5405 or zoe.redhead@bankofscotland.co.uk

For further information, contact:
Ed Smith
Media Relations Manager, SME Banking,
Commercial Banking & Consumer Finance
ed.smith1@lloydsbanking.com
T: 020 7661 4936
M: 07917 520464

Phil Smith
Economist, Markit
Telephone +44-1491-461009
Email phil.smith@markit.com

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