South East: PMI signals output growing for third month running

The latest PMI (Purchasing Managers' Index) data from Lloyds TSB signaled that private sector output in the South East continued to recover mid-way through Q1 from a stagnation during the final quarter of 2012.
That said, the improvement in business conditions lost some momentum since January, as output, new orders and employment all expanded more slowly during the latest period.

Pressure on firms’ margins remained, as input prices rose at a rate broadly in line with the survey’s historic average, yet prices charged for goods and services declined for the seventh month running.

Private sector output in the South East rose for the third successive month in February. The Lloyds TSB South East Business Activity Index – which measures the combined output of the region’s manufacturing and service sectors – fell from January’s nine-month high of 57.3 to 53.8, signalling a solid rate of growth.

Manufacturers generally linked output growth to higher new orders, while a number of service providers reported the positive impact of marketing campaigns in bringing in new business. Activity growth was maintained across both manufacturing and service sectors in February.

New business volumes also rose for the third successive month, supporting firms’ workloads. In line with the trend for total activity, new business grew at a slower rate in February. Data signalled that new orders at manufacturers continued to fall.

Receipts of new business were strong enough to generate further increases in employment in February. Jobs growth has been maintained for the past six months, and the latest rate of expansion was slightly stronger than the survey’s long-run average.