Survey displays hopeful signs for regional business activity

An increasingly strong performance by the South West of England helped push growth in business activity in the country in the final quarter of last year to its highest level for at least 12 years, according to a survey.

The regional purchasing managers' index produced by Lloyds Bank reported solid growth in business activity across all nine English regions in spite of a slight slackening in December.

Wales bucked the trend, reporting growth in business activity in December that was close to a record high.

Tim Hinton, managing director for small and medium-sized businesses, said: "London and the South East showed some signs of slowing momentum from recent record highs, but other areas outside the Capital such as the South West and West Midlands are making increasingly strong contributions to the impressive growth picture for the UK as a whole."

The South West reached the top of the regional performance table in England, while the West Midlands moved up to second place.

There were signs of a slowdown in London and the South East, with these indices dipping to six-month and five-month lows respectively in December. Yorkshire and Humber recorded the weakest expansion of all English regions.

The final three months of 2013 saw the strongest private sector growth across any quarter since the survey began in 2001 with an average reading of 61, well in excess of the 50 value that separates growth from contraction.

The latest survey follows unexpectedly weak official data from the manufacturing and construction sectors for November. This prompted economists, who because of other upbeat surveys were expecting the economy to accelerate in the fourth quarter, to reduce their growth forecasts slightly.

South West companies led the way in hiring staff, followed by businesses in the South East and London. Relatively modest levels of employment growth were recorded in Wales and the North East.

Rising costs continued to affect private sector businesses during December, with the North West and East Midlands reporting the strongest increases in input prices

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