SW employment rises at fastest rate for 18 months

Firms in the South West enjoyed a month of solid growth during July, with employment rising at the fastest rate in 18 months, according to the latest Lloyds Bank UK Regional PMI® survey.

The increase in job creation underlined an overall improvement in the region’s economic performance, with local firms seeing growth in new business orders and output levels.

The South West PMI rose to 54.0 in July, up from 52.6 in June. A reading greater than 50.0 signifies growth in business activity, whereas below 50 indicates a decline.

Data for July also showed another rise in input costs – including raw materials, salaries, rent and other overheads - partly due to the weak pound and rising pay. This caused firms to pass on some of their cost burden to customers by upping selling 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 July compared with a month earlier.

David Beaumont, regional director for SME banking in the South West at Lloyds Bank Commercial Banking, said: “The South West economy regained momentum at the start of the second half of the year. Businesses were able to create new regional jobs at the fastest rate since January 2016 thanks to increased demand for their goods and services.

“Adding to the positive picture, local firms are now expecting to complete more new work in the year ahead. This will likely give the region’s economy a further boost in the months to come; though elevated inflationary costs remain a problem for most.”