Economic growth in England and Wales lost further momentum in August, as most regions recorded smaller increases in business activity and new work, according to the latest Lloyds Bank Regional Purchasing Managers’ Index® (PMI®).
The business activity index for England registered a 27-month low of 55.7 in August, down from 56.7 in July, even after accounting for a seasonal slowdown in activity. Growth has now weakened in four of the past five months; however the index remains well above the 50.0 ‘no-change’ mark.
The East Midlands and East of England recorded the joint-fastest increases in business activity (both at 57.8). The East Midlands along with the South East were the only two regions to register a quicker rate of expansion than July. The North West saw the weakest overall rise in activity showing a 28-month low (52.1) followed by the South West (53.4).
Survey data for August signalled continued improvements in Scotland’s private sector, as output and new orders expanded across both the manufacturing and service sectors. Nevertheless, in all cases rates of expansion eased since July.
Following a reduction seen in the previous month, staffing levels rose in August. The expansion was broad-based by sector. Meanwhile, cost burdens rose at the slowest rate in 16-and-a-half years, while competitiveness led businesses to offer price discounts.
The seasonally adjusted headline Bank of Scotland PMI - a single-figure measure of the month-on-month change in combined manufacturing and services output - fell to 50.8 in August, down from 52.2 in July. Despite signalling growth for the fifth successive month, the index eased to the lowest since April.
Sector data signalled slight increases in output across both the manufacturing and service sectors. Domestic demand was sustained, with both sectors reporting growth in new business in August. Survey participants linked the overall rise in new business inflows to investments in marketing campaigns. However, manufacturers felt the effect of a strong pound as new export orders fell sharply.