South East: Region tops UK growth table, says Lloyds Bank Commercial Banking

Private sector output in the South East rose more sharply than in any other UK region surveyed in November, as did the volume of new business. Total activity, new orders and employment all rose at the fastest rates since July. Input price inflation picked up but remained historically weak, while prices charged for goods and services rose only marginally.

The headline 'Lloyds Bank South East Business Activity Index' – a seasonally-adjusted index that tracks changes in the combined output of the region’s manufacturing and service sectors – rose to 60.3 in November, from 58.6 in October. That signalled a marked rate of output growth in the region that was the fastest since July. It was also sharper than any other UK region surveyed.

A similar trend was evident for inflows of new business, which increased at the fastest rate in four months and also topped the UK regional growth rankings.

Broad sector data signalled that the service sector continued to post faster increases in both total activity and new business than manufacturing.

The volume of outstanding business at private sector firms in the South East rose for the 17th successive month in November, despite a further fall in manufacturing backlogs. The overall rate of growth slowed to a marginal pace, however.

The latest survey revealed ongoing broad-based growth of employment in the South East in November, with the private sector workforce expanding overall for the 20th consecutive month. Service sector companies continued to record a faster rate of job creation than goods producers.

Average input prices rose for the 28th month in a row in November, partly linked by survey respondents to wage pressures. The rate of inflation was in line with the UK average and the fastest in four months, but remained weak in the context of historic survey data. Meanwhile, prices charged for goods and services rose at only a marginal rate.

Commenting on the 'Lloyds Bank Commercial Banking South East PMI survey', Mark Handscomb, area director for SME banking in South Central England, Lloyds Bank Commercial Banking, said: “Private sector firms across the South East look set to end the year on a high note, having recorded the strongest gains in output and new business of all UK regions in November. This outperformance was again driven by the services economy. Encouragingly, there is also little sign yet of any significant pick-up in inflationary pressures.”