Output growth in England remains subdued in May
The weakness reflected a deteriorating trend in the flow of incoming new work, with job creation slowing as a result.
The business activity index for England – which tracks changes in the combined output of the manufacturing and service sectors – registered 53.3 in May, up from April’s 37-month low of 52.1, but still signalling one of the slowest rises in output over the past three years.
Indeed, the index’s average for the second quarter so far (52.7) is the lowest since the first quarter of 2013.
Business activity rose across eight of the nine English regions monitored by the survey, led by the East Midlands (55.4) and Yorkshire & Humber (55.1). However four regions recorded slower growth, and output fell in the North East (48.5) for the third month running and at the fastest rate since March 2013.
Subdued growth in overall business activity was partly a reflection of a weaker trend in the flow of incoming new work, which showed the slowest rise since February 2013 across England as a whole.
Wales’ private sector economy lost further momentum in May, with output growth at a 45-month low and new business moving closer to stagnation.
On the employment front, May saw the pace of job creation slow across England to the lowest for three years amid reports of the National Living Wage impacting on hiring. Staffing levels were broadly unchanged in the South East, while Yorkshire & Humber saw a further decline.
Wales, on the other hand, recorded the strongest rise in employment in five months, albeit moderate.
Elsewhere, the survey showed a slightly faster rise in average prices charged for goods and services in May, with cost inflation running close to, but slightly below, April’s recent high. ■