Output growth slowed in six of the nine English regions, according to the results of the purchasing managers’ index (PMI) – a survey of private sector firms – published by Lloyds Bank this morning.
The overall figure for the UK dropped to 55.8 in October from 57.5 in September – a score above 50 signifies growth, implying that growth remains strong despite losing momentum.
The score for London dropped to its lowest 18 months, and now sits at 54.4. The closest region to stagnation was the South West, which dipped to 52.5, also an 18-month low.
However, the West Midlands, South East and East Midlands all registered an increase in growth, with the West Midlands scoring the highest for the UK at 59.8.
“Following rapid growth seen earlier this year, many regions have reported a slowdown in activity during October,” said Tim Hinton, managing director of mid-markets banking at Lloyds Bank.
“However, rising employment in manufacturing and service sectors imply continued momentum and suggest that we should remain positive about the longer term outlook.”
Over the summer months, many regions frequently scored above 60. The slowdown correlates with a renewed economic downturn in Europe – the UK’s largest export market – just as it looked to be escaping recession at the beginning of 2014.
The fall in the regional PMIs is also consistent with a decline in the Services PMI released last week. The PMI for construction also fell, but month-to-month data for construction tend to be volatile.
It is widely expected that the weak PMI figures will impact Wednesday’s Bank of England growth forecasts.