Solid growth in new business for SW firms

South West firms enjoyed another solid month of growth supported by a boost in new orders in May, according to the latest Lloyds Bank UK Regional PMI survey.

The South West PMI fell to 53.8 in May, showing that business activity expanded at a solid pace, albeit more slowly than in April, when the PMI was at 56.7. A reading greater than 50.0 signifies growth in business activity.

Employment also rose during May as jobs were created at the quickest pace this year so far. Businesses linked job creation to an increase in demand and new orders.

Costs – including raw materials and wages – continued to rise, albeit at a slower pace, causing businesses to pass on their cost burden to customers by upping prices for goods and services.

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.

David Beaumont, regional director for SME banking in the South West at Lloyds Bank Commercial Banking, said: “Overall growth of business activity in the South West remained solid, with output increasing for the tenth consecutive month in May, albeit at a slower pace than the month before.

“New orders resulted in the most robust round of job creation this year so far, and although prices continued to rise, inflation of both input and output prices softened, painting a positive picture for South West firms.”