South East: Employment falls for first time in 16 months

Employment in the South East fell for the first time in 16 months in November, according to the latest Lloyds Bank Regional Purchasing Managers Index.

The South East PMI registered 54.3 in November, marginally higher than 54.2 in October. A reading greater than 50.0 signifies growth in business activity, whereas a reading below signals contraction.

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 November compared with a month earlier.

Private-sector employment decreased in November, ending a run of job creation stretching back to August last year. The South East was the only region in the UK to see a fall in private-sector employment.

November saw solid growth in business activity, fuelled by an increase in new business. Firms meanwhile faced a further rise in input costs, partly due to the exchange rate, and in part passed these cost burdens on to customers in the form of higher prices charged for goods and services. 

Phil Kirk, regional director for the South East at Lloyds Bank Commercial Banking, said: “Firms are pausing hiring plans in the run up to the end of the year, as they focus on securing new business. Overall, the region has seen strong growth but businesses will need to prioritise securing a steady pipeline of orders.

“A weak sterling exchange rate is eating into firms’ profit margins, particularly those that import raw materials.”