Rising output eases fears of recession

 
Julian Harris
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PRIVATE sector output has continued to expand in nearly every English region, a survey by Lloyds TSB revealed this morning.

The latest purchasing managers’ index showed that output grew in every region except for the south west.

“Despite an overall dip in growth from January’s high, private sector activity across the English regions still expanded at a relatively solid pace during February,” commented Lloyds’ John Maltby. “This provided another welcome antidote to lingering fears of a double-dip recession at the turn of the year.”

The survey’s PMI ratings for February came in at 54.5 for England, down from 56.3 in January, and 53.6 for the UK as a whole, down from 55.9 the previous month.

All scores above 50 indicate economic expansion.

Private sector output continued to fall in Northern Ireland, with a score of 45.3 and slipped into contraction in Wales, at 49.7.

In England, the growth in output caused a “moderate” expansion of private sector employment – although employment actually fell in London, the survey claimed.

“Only companies in London saw a drop in their staffing levels, which extended the current period of falling employment across the capital to four months,” the report said.

The highest level of private industry output growth was recorded in the west Midlands, where the PMI score hit a 53 month high.

The Midlands as a whole also saw faster growth in new business, compared to the UK average.

While output charges fell, the survey contained a warning over potential inflationary threats. “The latest survey indicates a general acceleration [in input cost inflation] since January amid signs that higher oil-related prices on world markets have started to place stronger pressure on cost burden,” it said.