Vivacta Kent Science Park
Excellent ROI
Home > News & Publications > News > Recent News

South East PMI - Output continued to rise at marked pace, supporting further jobs growth

14 June 2010

Key points:

  • Activity growth remained above the UK average.
  • New order growth slowed to eight-month low.
  • Employment rose for second month running.

Historical Overview: 

Summary: 

The South East PMI® report, conducted by Markit on behalf of the South East England Development Agency (SEEDA), signalled a continuation of the rebound in private sector activity in the region during May. At 58.7, up from 58.1 in April, the headline seasonally adjusted Business Activity Index – which measures the combined output of the region’s manufacturing and service sectors – indicated a strong rise in business activity in May.

The latest figures also suggested that South East output continued to grow at a relatively sharp rate compared to the rest of the UK. Both manufacturing and services posted above-trend activity growth, with the former recording another marked increase in output. Meanwhile, inflationary pressures were slightly weaker than the nationwide trend.

The South East recorded an eleventh successive monthly rise in private sector business activity in May. The rate of growth remained strong, and close

to the trend over the first five months of 2010. Manufacturing again posted a relatively sharp rate of expansion, although services activity continued to rise at a rate that was stronger than the historic trend.

Higher levels of incoming new business continued to support the overall expansion in activity during May. New orders have increased every month since July 2009. However, the rate of growth in the latest period was the weakest since September 2009.

Private sector manufacturing and services employment rose overall for the second month running in May. The latest expansion reflected increased recruitment in both sectors, and was mainly linked to rising workloads and new clients.

South East companies reported another decline in backlogs in May. There was a divergence across manufacturing and services, with the former posting growth of outstanding work. This reflected further marked growth of new orders at manufacturers.

May data signalled further upward pressure on both input and output prices. Average input costs rose for the eighth month running, and at the second-fastest rate since September 2008. Metals, timber and oil-related products were frequently mentioned as sources of inflationary pressure. That said, the South East posted a weaker rate of cost inflation than the UK as a whole. The same trend was signalled for output prices, where the rate of inflation was muted in May.

Comment: 

Commenting on the South East PMI survey, Paul Lovejoy, Executive Director at SEEDA, said:

“It is encouraging to see that the South East economy continues to improve, as indicated by a further strong rise in business activity in May, which has been supported by another rise in recruitment activities. The fact that the region’s economy grew at a relatively strong rate compared to the rest of the UK, shows that the South East is able to build on its strengths as the UK’s economic powerhouse.

“Services activity, which forms the largest part of the economy, continued to expand at a rate above the historic trend. However, continued increases in input prices could slow the revival, especially for manufacturing companies.”

For further information, please contact:

SEEDA

Ivan Perkovic

Head of Economic Research

SEEDA

Tel: 01483 501307

Email: ivanperkovic@seeda.co.uk

Press Office

SEEDA

Tel: 01483 470155

Email: sofiaylen@seeda.co.uk

 

Markit

Trevor Balchin, Senior Economist                       
Telephone +44-1491-461-065                             
Email trevor.balchin@markit.com 

 

Caroline Lumley, Corporate Communications
Telephone +44-20-7260-2047
Email caroline.lumley@markit.com

For more information please contact our press office

Tel: 01483 470155