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Activity grows with a rise in SW orders
11/05/2010
Research by economists at financial information service Markit showed the pace of economic expansion, although increased in April, was broadly unchanged from the previous survey period.
The data also revealed input cost inflation was the strongest since September 2008.
The data comes from Markit's Purchasing Managers' Index (PMI), a monthly survey of selected companies sponsored by the South West Regional Development Agency and designed to provide an early indication of what's really happening in the private-sector economy by tracking a range of variables such as output, new orders, employment and prices.
The headline seasonally-adjusted Business Activity Index, which measures the combined output of the region's manufacturing and service sectors, posted 56.0 in April, up from 55.9 in March.
This is calculated from the percentages of respondents reporting an improvement, no change or decline, with readings above 50.0 signalling an improvement.
The report said the manufacturing sector predominately drove the strengthening in business conditions, as output growth in the region's service sector was still modest.
It showed business activity in the South West had increased in April for a 12th successive month.
The rate of growth, broadly unchanged since March, remained slower than that seen in the UK as a whole, and expansion of business activity in the UK weakened during the month.
Nevertheless, incoming new business received by the region's firms increased markedly during April.
Higher new orders received by manufacturers supported the overall rise in work, with panellists in the service sector reporting a marginal reduction in new business.
April's data signalled a second successive rise in employment in the South West, with staffing levels increasing at a solid pace, and the rate of growth being faster than that recorded for the broader UK economy.
Outstanding business reduced at its weakest pace in the current 32-month period of contraction, said Markit.
The region's service sector predominately contributed towards the decline, with manufacturing companies reporting a rise in backlogs.
This reflected the expansion in new orders which was seen in the manufacturing industry, alongside delays in obtaining some raw materials.
April data signalled a substantial rise in input costs faced by companies in the South West, the research found.
Rising fuel and raw material prices, particularly for metals, drove input cost inflation, which was at its strongest since September 2008.
Panellists in both the manufacturing and service sectors reported a rise in input prices, although it was more marked in the former sector.
As a result, output prices increased. However, the rate at which charges rose was modest, and the slowest during the current three-month period of rising output prices.
Anecdotal evidence suggested strong competition prevented a greater increase in charges.
Sarah Ledger, an economist at Markit, said: "Growth of the South West economy has now been sustained over the course of 12 months.
"While the latest increase in activity continued to be led by the region's manufacturing sector, it's encouraging that an overall expansion appears to be taking hold.
"Reinforcing this, employment rose for a second consecutive month, which will help to lift consumer demand in the South West."
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Activity grows with a rise in SW orders
11/05/2010
Research by economists at financial information service Markit showed the pace of economic expansion, although increased in April, was broadly unchanged from the previous survey period.
The data also revealed input cost inflation was the strongest since September 2008.
The data comes from Markit's Purchasing Managers' Index (PMI), a monthly survey of selected companies sponsored by the South West Regional Development Agency and designed to provide an early indication of what's really happening in the private-sector economy by tracking a range of variables such as output, new orders, employment and prices.
The headline seasonally-adjusted Business Activity Index, which measures the combined output of the region's manufacturing and service sectors, posted 56.0 in April, up from 55.9 in March.
This is calculated from the percentages of respondents reporting an improvement, no change or decline, with readings above 50.0 signalling an improvement.
The report said the manufacturing sector predominately drove the strengthening in business conditions, as output growth in the region's service sector was still modest.
It showed business activity in the South West had increased in April for a 12th successive month.
The rate of growth, broadly unchanged since March, remained slower than that seen in the UK as a whole, and expansion of business activity in the UK weakened during the month.
Nevertheless, incoming new business received by the region's firms increased markedly during April.
Higher new orders received by manufacturers supported the overall rise in work, with panellists in the service sector reporting a marginal reduction in new business.
April's data signalled a second successive rise in employment in the South West, with staffing levels increasing at a solid pace, and the rate of growth being faster than that recorded for the broader UK economy.
Outstanding business reduced at its weakest pace in the current 32-month period of contraction, said Markit.
The region's service sector predominately contributed towards the decline, with manufacturing companies reporting a rise in backlogs.
This reflected the expansion in new orders which was seen in the manufacturing industry, alongside delays in obtaining some raw materials.
April data signalled a substantial rise in input costs faced by companies in the South West, the research found.
Rising fuel and raw material prices, particularly for metals, drove input cost inflation, which was at its strongest since September 2008.
Panellists in both the manufacturing and service sectors reported a rise in input prices, although it was more marked in the former sector.
As a result, output prices increased. However, the rate at which charges rose was modest, and the slowest during the current three-month period of rising output prices.
Anecdotal evidence suggested strong competition prevented a greater increase in charges.
Sarah Ledger, an economist at Markit, said: "Growth of the South West economy has now been sustained over the course of 12 months.
"While the latest increase in activity continued to be led by the region's manufacturing sector, it's encouraging that an overall expansion appears to be taking hold.
"Reinforcing this, employment rose for a second consecutive month, which will help to lift consumer demand in the South West."
