South East: Growth slows in May to eight-month low

Business activity in the South East increased at the slowest rate for eight months in May, as inflows of new orders cooled according to the latest Lloyds Bank UK Regional PMI survey.

The South East PMI registered 53.7, down sharply from April’s 57.1. A reading greater than 50.0 signifies growth in business activity.

Demand for the region’s good and services increased, but momentum cooled from April’s 16-month high. Job creation in the private sector also slowed in May.

Firms faced steep growth in input costs, although these increased at the lowest rate since last September. This was reflected in prices charged to customers which also rose, albeit at the weakest rate since January. 

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

Adam Rainey, regional director for SME banking in the South East at Lloyds Bank Commercial Banking, said:“Businesses across the South East saw further growth in May – though at a slower pace than in the first quarter of the year.

 “Manufacturers are feeling the impact of rising raw material costs and, coupled with uncertainty in the wider economy, this is resulting in higher charges for goods. Despite this, new jobs are still being created in the region and post-election, firms will be looking for a more stable business environment.”