Latest Lloyds Bank UK Regional Purchasing Managers’ Index reports faster growth in both new orders and the total value of goods and services produced by the region’s economy. Tony McDonough reports.

Businesses in the North West saw growth accelerate at the end of 2016 with increased demand leading to a rise in job creation.

According to the latest Lloyds Bank UK Regional Purchasing Managers’ Index (PMI) survey there was faster growth in both new orders and the total value of goods and services produced by the region’s economy.

Companies reported that stronger domestic and international demand was the driving force behind an increase in new orders, which in turn resulted in the creation of jobs across the region.

The North West PMI was 56.6 in December, up from 55.7 in November, showing that the region’s business activity increased at a faster rate than in November.

The rate of growth in December was broadly in line with the UK as a whole, and the North West saw its highest quarterly average PMI (56.9) since the third quarter of 2014.      

The Lloyds Bank PMI, or Purchasing Managers’ Index, is based on responses from manufacturers and services businesses about the volume of goods and services produced during December compared with a month earlier.

Reflecting the improvements in demand and workloads, firms took on additional workers at the quickest rate in 18 months during December.

But the weakness of sterling continued to heap upward pressure on businesses’ costs, which again increased sharply, and firms passed this on to customers by hiking the price of their goods and services.

Martyn Kendrick, regional director for SME Banking in the North West, said: “Companies in the North West ended 2016 on a strong footing, with an acceleration of what was already strong growth in both activity and new orders.

“Companies showed a greater willingness to take on more workers, with the rate of job creation picking up to an 18-month high.

“However, there remained strong upward pressure on costs from the weakness of the pound, which continued to lead to price rises.”