A purchasing managers’ index (PMI) – calculated from a survey of private sector firms – dropped to 55.2 in December from November’s 57.6, according to figures released by Lloyds Bank today.
A PMI value above 50 signifies expansion.
The drop from implies the economy is growing, but at a slower rate. It takes the UK’s rate of expansion to a 19-month low.
Many regions saw a slowdown in new business growth in December as shown by the new business growth component of the survey.
The largest decline in new business growth was in Yorkshire and the Humber where the new business score dropped to 54.3 from 59.
Firms cited the uncertain global economic outlook as a concern at the end of the year. Firms continued to boost their headcount, but rate of increase slowed.
The sharpest rise in staff levels was in the east of England where the survey component score was 56.7.
The slowest hiring was in the north east where the index value of 51.4 – near to the 50 level that represents “no change”.
“Firms across England and Wales remain in expansion mode, but there are signs that the recovery slipped down a gear at the end of 2014,” said Tim Hinton, a managing director at Lloyds Bank.
“Global economic uncertainty is affecting firms’ confidence to invest and ability to grow, but falling oil prices may start to ease cost pressures for companies and help support consumer spending in the months ahead.”
Fears of an end-2014 slowdown in the British economy have already been fuelled by weak PMIs for the manufacturing and service sectors which make up about 90 per cent of GDP.