North West firms defy Brexit gloom

Latest Lloyds PMI report reveals a rise in orders and exports


Firms in Merseyside and the North West are defying the Brexit vote doom and gloom with orders and exports both on the rise.

The latest Lloyds Bank PMI report shows business activity levels and new orders increasing at a faster rate than the UK average following a fall last month.

Growth in exports, increased capital investment and a rise in new orders meant that activity levels rose sharply in August, after contracting for the first time in three-and-a-half years in July following the EU referendum result.

The North West’s PMI, or purchasing managers’ index, was 55.7 in August, up from 49.2 in July. A reading of above 50 signifies growth, while a reading below signals contraction.

Despite experiencing growth, private sector firms cut jobs for the first time in more than three years.

The fall in employment was modest but contrasted with a rise across the UK as a whole.

The weak pound continued to have an impact on businesses in August, with input costs rising across the region.

Consequently, firms increased their selling prices to offset higher costs, with the average price charged for goods and services increasing by the largest amount in two-and-a-half years.

Martyn Kendrick, regional director for SME Banking in the North West, said:

“August saw signs of improvement in the North West economy, which contrasted with the downbeat picture observed in July.

“Both activity and new orders increased having declined last month. However, firms showed a degree of caution towards taking on additional staff, with employment falling for the first time in more than three years.

“The weakness of the pound continued to cause issues for businesses, with rising input costs meaning that firms across the region increased their selling prices.

“The rebound in activity is good news for businesses across the North West, and it’s vital that firms plan carefully to capitalise on expansion opportunities and navigate any future challenges.”

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