Strong growth in regional business
- Credit: PA
Business activity in English regions rose at its fastest rate for more than a year in May, a survey showed today.
The figure of 54.8, up strongly from 52.2 in April, showed it was comfortably above the level of 50 that separates growth from contraction. It was the best rate since March 2012.
The Lloyds TSB Regional Purchasing Managers Index also showed that for the first time since January 2012, business activity rose in all nine English regions.
It meant that the North East finally turned the corner, with a reading of 51.2 points, though it remained the weakest performing part of the country, followed by the East of England on 52.2. Yorkshire and Humber (57.6) and London (56.4) were the best performing regions.
The data adds to increasing optimism about the state of the economy after surveys last week showed manufacturing and construction had returned to growth, strengthening the gains already being made by the powerhouse services sector.
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The survey found anecdotal evidence that stronger underlying demand and improving domestic economic conditions supported business activity in May.
All regions reported higher levels of new work though only London and the South East saw an increase in backlogs.
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A number of those taking part in the survey highlighted a lack of pressure on operating capacity, meaning there was only marginal job creation among private sector companies.
The West Midlands led the way in terms of employment on 52.4, followed by the South West (52.0) and the East of England (52.0).
David Oldfield, managing director of small and medium enterprise and mid markets banking at Lloyds Banking Group, said: "May's survey provides further evidence that the UK economy is picking up, highlighted by rising levels of activity and new work in all nine regions.
"Yorkshire & Humber and London led the regional growth table in May, with their places cemented by strong service sector performances.
"The strong growth in order books also offers hope that the recent upturn in activity should gain momentum over the coming months. This in turn should start to give local firms the confidence they need to step up the pace of job creation and further boost the economy."