East Midlands firms reported faster growth in business activity than the UK average and employed more staff in February, according to the latest Lloyds Bank Regional Purchasing Managers’ Index (PMI) survey.
The East Midlands PMI rose to 55.0 in February, from 53.5 in January. A reading of above 50 signifies expansion in business activity, and the rate of growth in the East Midlands was faster than the UK average.
The weak pound put high pressure on firms’ input costs – including staff wages and raw materials – and although the rate of inflation eased slightly, it still drove local businesses to raise prices for goods and services.
The region’s companies expressed optimism, however, regarding future output growth in February, and expect to see an increase in their order books as demand for their products and services climbs. To meet this demand, East Midlands firms took on more staff in February.
The Lloyds Bank PMI is the leading economic health-check of UK regions. It is based on responses from manufacturers and services businesses about the volume of goods and services produced during February compared with a month earlier.
Kelly Green, regional director for the East Midlands, Lloyds Bank Commercial Banking, said: “After a relatively subdued start to the year, February saw a pick-up in growth in the East Midlands for the first time in three months, to a rate above the UK average.
“Just as elsewhere, however, the weak pound continued to put major upward pressure on costs, causing businesses to push up their prices as well.
“On a positive note, demand appears to be holding up well and local firms are optimistic for the coming year”.