According to the latest Lloyds TSB South West Business Activity Index, in November private sector output grew at its strongest pace in seven months.
The research showed that growth of new business also accelerated during the month, supporting another increase in staffing levels. Manufacturing remained the predominate driver of overall growth, although the region’s service sector also showed some signs of recovery during the month.
Meanwhile, a substantial rate of input cost inflation was recorded. However, charges only rose slightly, as strong competition for new business limited the extent of the increase.
Business activity in the south west has now increased for 19 successive months. The latest rise in output was slightly above the average for the current sequence of growth.
The expansion in activity was supported by a further increase in new business received by companies in the south west. November’s rise in new work intakes was the strongest since February, and above that indicated for the UK as a whole.
Outstanding business at companies reduced fractionally during November. Whilst the region’s service sector reported a recovery in new business, work in hand decreased due to the ongoing impact on operating capacity from recent contractions in new work intakes. However, backlogs at manufacturers continued to rise sharply.
Employment in the south west increased for a third successive month in November. The increase in staffing levels was largely driven by job creation in the manufacturing sector, and was faster than that indicated for the UK as a whole.
Input price inflation accelerated sharply during November, with the latest rise the joint-strongest in the current twenty-three month sequence of increasing costs.
Output prices also rose in November, although the pace of increase was only slight. Many panellists indicated that the extent of the rise in charges was limited due to strong competition for new business.”
Commenting on survey, David Beaumont, area director for Lloyds TSB Commercial in Devon and Cornwall, said: “Growth of the South West private sector economy strengthened during November, with the business activity index at its highest in seven months. The region continued to see a faster rate of growth than the UK as a whole. Improved business conditions resulted in a solid rise in employment levels in the region, and the latest expansion was the sharpest for five months.”