South East: Business activity returns to growth after post-EU vote contraction, says Lloyds

Business activity in the South East rebounded in August following a brief post-referendum downturn, according to the latest Lloyds Bank Regional PMI. 

The South East of England PMI jumped from 45.5 to 54.3 in August. A PMI reading of above 50 signifies growth and below 50 indicates contraction.

Data for August revealed that business output levels increased as a result of a jump in new business wins and bumper order books for firms.

Growth in new business has been accredited to firms launching new products, marketing initiatives and sales staff working extra hours.

The Lloyds Bank Regional PMI, or purchasing managers’ index, is the leading economic health-check of UK regions. It is based on responses from manufacturers and services businesses about the value of goods and services produced during August compared with a month earlier.

Cost inflation reached a five-year high in August. Local companies reacted to increased import costs due to the exchange rate and higher wage bills by upping their selling prices.

Ian Patterson, regional director for the South East, Lloyds Bank Commercial Banking, said: “August’s index shows welcome signs that July’s downturn was temporary. All measures of corporate health - output, new orders and employment – returned to above the 50 mark to signal an overall improvement in business conditions.

“It is especially encouraging that companies were able to secure new business wins despite raising their selling prices, and we’re committed to supporting businesses as they continue to navigate the post-EU referendum landscape.”