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Rapid growth of output and new orders across region

Phil Beales, Lloyds TSB Commercial Banking area director for Kent and East Sussex
Phil Beales, Lloyds TSB Commercial Banking area director for Kent and East Sussex

More good economic news is reflected in the latest purchasing data showing business activity across Kent and the south east growing at its fastest rate in more than two years.

Research from Lloyds TSB, published today, showed solid expansion in the South East private sector with output and new orders increasing rapidly.

The Lloyds TSB South East Business Activity Index – a seasonally adjusted index that measures the combined output of the region’s manufacturing and service sectors – rose from 54.8 in June to 59.5 in July. This is the fastest rate of acceleration in 28 months.

New orders rose at their quickest pace since September 2007. While employment increased in July, the rate of growth was curbed by the relative weakness in the manufacturing sector.

Employment in the South East’s private sector grew for the fourth consecutive month in July, which may have been due to new projects and a recovery in the housing market. Service providers led the growth in payroll numbers in July, whilst overall manufacturing data showed marginally lower levels of employment.

Business outstanding rose in July for the first time since January 2010, mainly in the service sector and due to higher volumes of orders and staff shortages.

Input costs rose for the twelfth consecutive month in July, though at a marginally slower pace, due to higher fuel costs, raw materials and commodities. The recent weakening of the pound was blamed for the increased cost of imported inputs.

Phil Beales, area director for Lloyds TSB Commercial Banking in Kent and East Sussex, said: “The South East’s private sector grew at an impressive rate in July, although the pace was fractionally slower than the national average. Anecdotal evidence indicated that the latest increase in employment was prompted by the sharp rises in business activity and new orders. The weak pound continued to trouble firms who relied heavily on imports, and it was cited by some for the input price inflation seen in July. Despite this, inflationary pressure remained relatively subdued.”

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