Business activity growth across England and Wales regained some momentum in October – Lloyds Bank Regional Purchasing Managers’ Index®

Business activity rises in all regions except the North East
Employment increases at a faster pace, led by strong job creation in East of England
Marginal rise in average charges for goods and services amid weak cost inflation and falling commodity prices

LONDON, 13-11-2015 — /EuropaWire/ — Business activity growth across England and Wales regained some momentum in October, having fallen to its slowest since early-2013 in September, according to the latest Lloyds Bank Regional Purchasing Managers’ Index® (PMI®).

The business activity index for England’s combined manufacturing and service sectors rose to 55.5, up from September’s 29-month low of 53.8. Although indicating a rebound in growth, the index remained below its average so far in 2015 (56.7).

Output increased in all but one of the English regions, and at quicker rates than the month before. The fastest business activity growth was in the East Midlands where the index reached a 14-month high of 58.4, followed by the East of England index at a three-month high of 58.1. The only exception to the general upturn was the North East, which recorded its first fall in business activity for two-and-a-half years, albeit one that was marginal with an index at 49.8.

In Wales business activity growth accelerated to a three-month high, its output index registering 55.4 from 53.0 in September.

Labour market conditions were given a boost as most English regions and Wales (index at 53.8) recorded faster rises in employment, the sharpest overall increase being in the East of England (index at 59.1).

Elsewhere, data continued to show only modest inflation in businesses’ costs, with low raw material prices counteracting growth in wages and salaries. Accordingly, prices charged for goods and services rose only slightly on average during the month.

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

“UK economic growth improved at the start of the fourth quarter led by output rises in the services and manufacturing sectors. In particular most Eastern regions performed well, with only the North East showing a modest fall in output.

“Falling raw material prices continue to subsidise other cost pressures, helping to protect consumers from rising prices and support demand in coming months.”

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 October 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 October 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