Private sector experiences surge in business activity

North West Private Sector

A survey conducted by the Lloyds Bank PMI (Purchasing Manager Index)  has revealed a significant increase in business activity for the North West Private Sector since last month at the quickest rate since October 2013. Aditionally the North West has also experienced growth in new orders and employment.

However inflationary pressures also continued to strengthen in August in contrast to the easing of cost pressures observed at the UK level.

The seasonally adjusted Lloyds Bank North West Business Activity Index surged to a 10 month peak of 61.2 in August, up from 59.1 in July. This figure proposed a promising expansion for the 20th consecutive time in private sector output.

Anecdotal evidence linked rises in activity to stronger order books. Output growth was faster at service companies than manufacturers in August. Meanwhile, new business in the North West private sector grew for the 19th month running in August.

Despite this the groth of new orders has slowed since July and remained weaker than the UK average. Surveyed firms cited the securing of new clients as the main cause behind stronger order book volumes.

Private sector companies also ensured further job creation throught Augustextending the current hiring sequence to 16 months.

However, the rate of employment growth eased to the slowest since November 2013 and was broadly in line with the UK-wide trend.

Average cost burdens in the North West increased solidly in August. The manufacturing sector proved to be a considerable driving – force behind the acceleration in input costs where the rate of cost inflation was the steepest for around three years.

s a result of rising input costs, output charges also increased in August.

The rate of charge inflation exceeded that recorded across the UK as a whole.

By sub-sector, the sharper increase in prices charged was registered at services firms.

Commenting on the survey, Martyn Kendrick, area director SME banking in the North West, Lloyds Bank Commercial Banking, said:

“Private sector business conditions continued to improve strongly in August across the North West.

“Based on current trends, the North West looks set to experience a continued upturn in both the manufacturing and services sectors through the remainder of 2014.”

Words: Daniel Pearce

Source: Liverpool Echo

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