The Lloyds TSB purchasing managers’ index (PMI) climbed to 52 during January, the bank said, up from 49.9 in December and therefore through the crucial 50 barrier, into territory indicating growth.
This new data adds to other research suggesting the UK will avoid slipping into its third recession in just five years.
The improvement came from growth in all but one English region, and expansion in three out of four of the UK’s constituent countries – despite some predictions that ugly weather would keep a lid on activity.
The capital’s private sector posted one of the stronger PMIs, at 52.3 growing slightly faster than the UK as a whole, though slightly slower than the South East, East Midlands, and Yorkshire, who recorded the fastest growth, with a PMI of 53.1.
The fastest growing country was Wales, with its 23-month high index level of 54.1, up from 52, ahead of Scotland on 52.3 and England on 51.6 – up from 50.1. Northern Ireland was the sole area of contraction – but even this shrinkage could be taken positively, as the decline came at the slowest pace in 14 months.
“Despite fears that private sector output at the start of the year would be disrupted by the heavy snowfall in January, the latest survey revealed an upturn in business activity across most of the English regions,” said Lloyds Banking Group managing director David Oldfield.
Oldfield highlighted the upbeat sub-index for employment, which suggested the private sector was still boosting jobs, as a particularly optimistic element of the data.
However separate figures from accountancy firm BDO, also out this morning, painted a drastically different picture of the UK economy. BDO’s forward-looking optimism index crashed from 90.3 in December to 88.9 last month – bringing it to its lowest ebb since the survey began 21 years ago.