Private sector employment in the South West grew at the fastest pace in over two years in August, according to the latest Lloyds Bank Regional Purchasing Managers’ Index.
The South West PMI recorded its highest reading in four months after climbing to 54.3 in August, up from 54.0 in July. The rate of expansion was also slightly faster than the UK average (54.0). A PMI reading above 50 signifies growth in business activity.
Data showed that business activity growth in August was underpinned by increased demand for goods and services, resulting in many firms expanding their workforce to facilitate this. Businesses remained optimistic about growth prospects, with confidence having picked up further from June’s post-election low.
Despite this, the weak pound and salary increases continued to put pressure on local businesses. 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 August compared with a month earlier.
Jo Costin, regional director for SME banking in Wiltshire at Lloyds Bank Commercial Banking, said: “The South West continued to grow on the back of rising demand for goods and services in August, with the labour market one of the biggest beneficiaries.
“Employment has now risen for fourteen months in a row, with the rate of job creation gathering pace as business confidence recovers from June’s post-election low.
“Price increases remain a threat, however, putting further pressure on both household and business budgets.”