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Sharp activity growth maintained in December, says Lloyds Bank


The latest PMI data from Lloyds Bank Commercial Banking signalled a further sharp expansion at private sector firms in the South East. While failing to match the record highs seen in November, growth in output, new business and backlogs of work was sharp in December. Moreover, this was reflected in the acceleration seen in employment growth, which hit a 161/2-year high.


The headline Lloyds Bank Commercial Banking South East Business Activity Index – a seasonally-adjusted index that measures the combined output of the region’s manufacturing and service sectors – posted at 60.1 in December, down from November’s record high of 63.3. This was the 12th successive month in which the index has posted above the 50.0 no-change mark, signalling an unbroken sequence of business activity expansion throughout 2013.


New orders grew sharply in December, though the pace eased marginally from November’s series record. Anecdotal evidence suggested increased marketing and improved optimism were contributory factors


to the latest increase in new business.


In accordance with the trends in output and new orders, backlogs of work expanded at a sharp rate in December, albeit one that failed to match November’s record high. Fuller order books and internal processing issues were cited by panellists as factors behind the latest accumulation of business outstanding.


In contrast, private sector employment in the South East rose at the sharpest rate since July 1997 and at a faster pace than the UK average. Anecdotal evidence suggested job creation was largely driven by the need to expand operating capacity to accommodate the recent sharp growth of new orders.


Input price inflation was evident for a 17th successive month in December. The pace of inflation accelerated fractionally from November and was exactly the same as the UK average. Respondents attributed the latest increase to rises in the price of coffee, energy, gas and insurance premiums.


Diverging from the trend seen in input costs, output prices increased only marginally in


December and slower than in November. At the sector level, it was manufacturers that drove the latest increase in charges, while output prices among service providers were broadly unchanged from November.


Commenting on the survey Paul Smart, area director SME banking in Thames Valley, Lloyds Bank Commercial Banking, said: “December’s survey revealed that while business activity in the South East continued to grow at an exceptionally strong level in December, it failed to match the record high set in November. Driven by a sharp expansion of new business in the latter half of 2013, business activity entered a 12th successive month of growth in December, while employment expanded at the strongest level since July 1997.”


Details: www.lloydsbank-commercialbanking.com www.markit.com


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www.wilkinskennedy.com THE BUSINESS MAGAZINE – THAMES VALLEY – FEBRUARY 2014 42252 WK Business Magazine ad E.indd 1 www.businessmag.co.uk 12/11/2013 16:12


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