Third month of accelerated growth in North West

A rise in new orders has helped North West business achieve accelerated growth in productivity for the third consecutive month.

The latest Lloyds Bank Regional Purchasing Managers’ Index report registered at 55.7 in the North West for September.

A reading above 50 shows growth in output, whereas a reading below indicates decline. The UK average was 54.1 and the North West registered 55.1 in August.

The cost of labour and weakness of the pound resulted in higher input costs for firms. These increased cost burdens were partly passed on to clients through higher prices charged for goods and services.

But while businesses continue to build capacity to satisfy growing new orders, the pace of job creation in the region slowed to an 11-month low.

Martyn Kendrick, regional director for the North West at Lloyds Bank Commercial Banking, said this was likely due to inflation, with both input and output price inflation at five-month highs in September.

He added: “As we enter the final quarter of 2017, businesses in the consumer goods and hospitality sectors will need to ensure they have the working capital necessary to take advantage of higher demand from events like Black Friday, Christmas and New Year. “Last month our Working Capital Index report found that businesses in the North West have £60.5bn tied up in excess working capital, which includes assets like stock and invoices. Cash that’s tied up in working capital can be released and invested in creating more stock or building capacity to meet higher demand over the festive season.”