Business activity increased across all English regions and Wales in May but at a slower rate than April in the majority of cases, according to the latest Lloyds Bank Regional Purchasing Managers’ Index® (PMI®). While growth generally remained strong, including further job creation, there were early signs of inflationary pressures returning last month.
Business activity in England rose at a solid rate in May to 55.9, but was the joint-weakest recorded over the past two years. The index was down from April’s 58.5 though still above its long-run average of 54.2. Any reading above the 50.0 ‘no-change’ mark indicates growth.
At 59.7, the North East saw the fastest rate of growth across England last month, down from 62.4 in April. The next-fastest increase in activity was recorded in the East of England (57.8) where the pace of expansion hit a four-month high, and a sharp increase in output was also seen in London (57.0).
Private sector activity in Scotland continued to strengthen during May, growing for a second month in a row and at the fastest pace since December. Growth was, however, centred on the service sector as operating conditions in manufacturing remained subdued.
The seasonally adjusted headline Bank of Scotland PMI – a single-figure measure of the month-on-month change in combined manufacturing and services output – strengthened to 51.9 in May, up from 50.7 in April. The latest reading was the best recorded of the year so far.
The service sector was the primary driver of growth, as a solid increase in new business drove activity up for the second month in a row. There were reports of success in winning new business from both domestic and international clients.