Region marching forward with fastest rate of growth

BUSINESS activity rose across the majority of English regions for the fifth successive month in March, research shows, with the fastest rates of expansion in Yorkshire and the Humber and London.

Both regions registered their best performance since August last year, the Lloyds TSB Regional Purchasing Managers’ Index said. At the other end, the South West and North East saw further slight falls in business activity and the West Midlands registered no change.

Martyn Kendrick, area director for Lloyds TSB Commercial Banking in Yorkshire, said: “Having reached a low point in February, Yorkshire and Humber’s private sector growth gained momentum in March, recording the greatest expansion seen since last
August.

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“Looking at the first quarter as a whole, the rate of growth was the fastest since early 2012 and was also the quickest of all nine English regions.

“The increase in output can largely be attributed to improvements in the service sector. Manufacturing acted as a drag on the region’s economy, and the sector was also the main cause for an overall reduction in employment numbers during March.”

With six of the nine English regions achieving growth, down from seven in February, the overall activity reading of 51.6 for March was above the no change mark of 50 for the fifth month running. The index rose to 53.3 from 51.3 in February in Yorkshire and the Humber.

The increase in private sector output in the region generally reflected larger volumes of new business, which companies attributed to new contract wins and greater client demand. New order growth was the strongest for almost two years in March, and the second-fastest among the nine English regions.

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Firms continued to report lower levels of work-in-hand (but not yet completed) in the latest survey period. The latest depletion of outstanding business was “solid” and faster than that recorded one month previously, the survey said.

Despite higher new order volumes, private sector firms reduced their workforces for the second month running in March in Yorkshire and the Humber. The rate of job losses was “moderate” and the decline was largely confined to manufacturing, as service providers hired additional staff in March.

Looking at the national picture, some of the companies reporting a rise in sales cited an improvement in export demand, especially across emerging markets in Asia. Employment levels were broadly unchanged in March on a national level, the survey added.

David Oldfield, managing director of small business and mid-markets banking at Lloyds, said it was encouraging the firms were continuing to find opportunities to expand their businesses, despite weather disruption and worries of a triple dip recession across the wider UK economy.

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