BUSINESSES in the north of England fell further behind their southern rivals in May, helping to drag down growth in the UK private sector, figures out today show.
The private sector remains in growth overall, with a purchasing managers’ index reading of 52.3 in May according to Lloyds TSB. However, it has slowed from 52.6 in April to reach a six-month low.
The north west of England slumped to a reading of 48.4 – below the 50 “no change” level and the region’s worst performance since March 2009. Lloyds blamed a fall in new order volumes at manufacturing firms.
The north east and Northern Ireland also reported a month-on-month contraction, according to Lloyds TSB’s figures, while Scotland hovered close to stagnation with a 17-month low of 50.8.
In contrast, the east Midlands recorded the fastest growth in the country, jumping three points to 54.4.
London, meanwhile, slipped 0.9 points to 53.3 but its business activity remains firmly in growth territory.
Companies across the country got some breathing space in the form of a slowdown in cost inflation, which rose at its slowest rate since September 2009.
“Companies again looked to price discounting to support growth in May,” said Lloyds TSB Commercial director John Maltby.
“This was helped by a marked moderation in cost inflation, with all regions now seeing slower rises in input prices than over the past 12 months.”