Member Article

October output upswing ‘a much-needed boost’ for North East businesses

The latest Lloyds Bank Regional Purchasing Managers’ Index (PMI) has found that North East businesses recorded their fastest rise in output of 2017 last month.

Providing an economic health-check of UK regions, the PMI is based on responses from manufacturers and service providers about the volume of goods and services produced during October compared with a month earlier.

The North East findings are based on a range of questions posed to businesses across Northumberland, County Durham, Tyne and Wear and the Tees Valley.

The North East PMI rose to 55.2 in October, up sharply from 51.9 in September, moving further above the 50.0 level that separates business growth from contraction. The increase was caused by the biggest bump in new orders since April.

Higher demand also led local businesses to take on new staff, ending three months of falling employment. However, the rate of job creation was hindered by another spike in business input costs linked to the weak pound and rising fuel prices.

North East firms offset some of this costs burden by passing it on to customers; raising the price they charge for goods and services. In fact, selling prices increased at the fastest rate for six months.

Leigh Taylor, regional director for the North East at Lloyds Bank Commercial Banking, explained: “It was great to see North East businesses receive a much-needed boost in October, as we move into the golden sales quarter for the region’s consumer goods and hospitality sectors.

“The positive effect this has had on employment should also be welcomed, with the private sector bringing on more new staff for the first time in four months.

“However, the survey also highlighted persistent cost pressures and firms scaled back their growth plans for the year ahead.

“Hopefully the upswing in activity will continue and cause regional businesses’ outlook for the year ahead to brighten.”

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