Q3 business activity accelerates across England and Wales

12th October 2016

Business activity throughout England and Wales continued to recover and accelerate at an impressive rate in Q3 – the fastest rate since January – according to the latest Lloyds Bank Regional Purchasing Managers' Index (PMI) survey.

September also experienced an additional increase in employment, though in most regions the rate of job creation remained slower than the beginning of the year.

The Lloyds Bank Regional PMI is based wholly on responses from business owners operating in the manufacturing and service sectors regarding the value of goods and services produced in the current month compared to the previous month.

The PMI in England was 54.0 in September, up from 53.7 in August, and stands at its highest reading since the turn of the year. All PMI readings above 50.0 represent some form of industry expansion, with any reading below 50.0 indicating a contraction.

Business activity increased across all English regions, with the strongest growth experienced in the West Midlands and Yorkshire and Humber (55.6). The area where output rose more modestly was the South East (51.6).

The data was even more encouraging for Welsh businesses with a rise in business activity, outperforming all English regions with a PMI reading of 56.2 – a 15-month high.

However, in terms of the economy, the recent decline in the value of Sterling resulted in higher business input costs and subsequent higher fees charged for goods and services.

Tim Hinton, managing director, mid-markets and SME banking, Lloyds Banking Group, said: “After a weaker activity was recorded in the early summer, it is encouraging to see a positive end of the third quarter, reflecting growth in new orders and employment.

“The weaker pound remains a focal point in the survey data. Improved competitiveness has no doubt given added impetus to the post-EU referendum rebound, but increasingly businesses are feeling the impact of higher import costs.”

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