South East: Business activity growth rebounds in June

Business activity in the South East gained momentum in June, according to the latest Lloyds Bank Regional Purchasing Managers’ Index.

The South East PMI registered 55.7 in June, recovering from May’s eight-month low of 53.7. A reading above 50 signifies expansion in business activity, and the greater the distance from the 50 level, the greater the rate of change signalled by the index.

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 June compared with a month earlier.

Growth in business activity was driven by a rise in new business orders, which increased at a faster rate than the UK average. Strong demand was fuelled by orders from international clients.

This uplift in business activity led to further job creation, with employment rising for the eleventh consecutive month in June. The pace of this growth cooled slightly from May, however.

The rate of increase in firms’ costs ­– including raw materials and wages – remained sharp but below the level at the start of the year. Businesses however still passed on some of the cost burden to customers in the form of higher prices, although these increased at the weakest pace in 11 months.

Phil Kirk, regional director for the South East at Lloyds Bank Commercial Banking, said: “The region’s firms have enjoyed a successful June, with new business driving a significant rise in activity after a slowdown in May. 

“This momentum is expected to continue as we head into the third quarter. A weaker pound is driving international demand for UK goods, fuelling business growth and feeding a strong new business pipeline.”