The Lloyds Bank East Midlands Business Activity Index – a seasonally adjusted index that measures the combined output of the region’s manufacturing and service sectors – posted 55.7 in April, up from 53.9 in March, signalling a sharper expansion in business activity in the region. In fact, the latest reading was the highest in three months and above the UK average. Firms linked activity growth to new project start-ups and stronger customer demand.
New orders increased at the fastest rate since January in April. Moreover, the pace of expansion surpassed that seen at the UK level. Some panellists mentioned new product launches and improved advertising as factors boosting new order growth.
Private sector firms hired additional staff in April, stretching the current period of employment growth to nearly three years. According to anecdotal evidence, company expansion plans and stronger demand led to the hiring of extra workers. However, the rate of job creation eased to the weakest in 2016 so far.
Amid stronger demand growth, pressures on capacity intensified and volumes of unfinished work were accumulated further. Moreover, the rate of expansion was the sharpest since October last year.
Due to the implementation of the National Living Wage and higher fuel costs, input prices rose in April. The rate of inflation was the quickest in over two years, but slower than the UK average.
Subsequently, East Midlands private sector firms increased their charges for the fourth month running.
Jon Pulford, regional director, SME Banking, East Midlands, Lloyds Bank Commercial Banking, said: “The East Midlands private sector economy continued to improve at thates since second January, which were quicker than their respective UK averages. Encoe start of the quarter. Both business activity and new orders increased at the sharpest ruragingly, firms hired additional workers, suggesting that the upturn in the region is likely to be sustained in the coming months. Meanwhile, the implementation of the National Living Wage and higher fuel prices led to a rise in input costs, which encouraged firms to increase their charges further”.