Latest Lloyds Bank PMI survey shows the weaker pound has boosted exports for companies across the region but also led to higher input prices. Tony McDonough reports.

Firms in Merseyside and the North West reported a rise in output and orders in September as the weak pound continued to boost exports.

It was the second positive month in a row, according to the latest Lloyds Bank PMI survey.

Companies linked the expansion in new orders to demand from both domestic and foreign clients.

However, while the weak currency encouraged exports, it also continued to suppress firms’ profit margins, with input prices rising at the strongest rate in more than five years.

The Lloyds PMI – or purchasing managers’ index – registered 53.8 in September, down from a seven-month high of 55.7 in August.

That signalled growth in business activity, but at a slightly slower rate than in August.

Employment decreased in September for the second month running. The marginal job losses in the region contrasted with the trend across the UK as a whole, where the rate of job creation was the fastest since April this year.

Martyn Kendrick, regional director for SME banking, Lloyds Bank Commercial Banking, said: “Although business levels grew slightly less quickly than in August, the latest survey data suggest the upturn in the North West private sector economy continued last month, as both outputs and new orders rose at rates broadly in line with UK-wide trends.

“However, the improvement in the economy wasn’t enough to encourage firms to take on additional workers, as employment declined for the second consecutive month.

“With average costs rising at the fastest rate in more than five years, businesses will be seeking to streamline operations, and it’s vital that company leaders plan carefully for any challenges that they might face.”