South East business activity increased in April at its fastest rate in two years due to a surge in demand, according to the latest Lloyds Bank UK regional PMI survey.
New orders rose for the ninth consecutive month, as demand for goods and services maintained strong momentum from both the home market and abroad.
The South East PMI registered 57.1 in April, above the UK average and the highest reading since April 2015. A reading above 50 signifies expansion in business activity.
The Lloyds Bank PMI, or purchasing managers’ index, is a 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 April compared with a month earlier.
South East businesses also raised employment at the fastest rate so far this year as a result of strong growth and new orders.
The rising cost of raw materials and higher salaries forced firms to increase their prices in April, with charges for goods and services rising at the fastest rate since June 2008.
Adam Rainey, regional director for Hampshire at Lloyds Bank Commercial Banking, said: “The South East economy performed particularly well in April, with domestic and foreign appetite for the region’s products and services on the up.
“The challenge for firms is rising input costs. At the moment, businesses are passing increased prices onto customers without damaging demand, which is still powering new business orders. That’s an encouraging sign that business strength will last throughout the year, but businesses still need to be careful.”