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Something cheerful from the north for ‘Blue Monday’

But don’t get over-excited; the context remains very challenging for months to come

No one should get a sudden flush of optimism, excellent though that is for well-being, specially on this, the supposed most-miserable day of the year. Not that there’s much danger of that if you read the newspapers. Typical examples of bleak prognoses are to be found, for example, here and here.

But my belief in the power, however limited, of the virtuous circle encourages me to pass on Lloyds TSB’s regular survey of business growth, or its opposite, in the English regions.

Published today, 16 January 2012, and covering private sector activity in December, it shows a universal rise this time, with Yorkshire and the Humber in top slot for the second month running. The bank’s Purchasing Managers’ Index (PMI) to give it its full name, comes larded with warnings about global uncertainty and the Eurozone crisis, but describes the figures as:

an encouraging rebound and the result of stronger new business inflow.

The pecking order for growth runs: Yorkshire and the Humber, East, West Midlands, North West, East Midlands, London, South East, South West and North East. The last-mentioned returned to growth after stalling in November, but it is not alone in that. London had a poor last quarter of 2011 overall.

John Maltby, group director at Lloyds TSB Commercial, says:

Current uncertainty in the Eurozone economies, which are key to the fortunes of many UK firms, may be dampening some of the recent optimism in the domestic economy, but wider export markets beyond Europe continue to show greater resilience.

As exports will be a key factor in leading the UK economic recovery, the increased output and employment shown in this month’s survey offer an encouraging sign that UK firms remain strong in the face of Eurozone fears.
The latest survey shows that businesses are moving in the right direction across the English regions, but the uncertain global economic outlook remains a drag on both business and consumer spending.

In the figures, a reading on the Purchasing Managers Index of 50 means growth, and the average across the nine English regions went up in December to 53.4 from 51.1. Yorkshire and the Humber achieved its best figure for nine months, only a little short of 55. London, the South East and the East Midlands all recovered from a slip-back in November, along with the North East.

Otherwise, input price inflation was little-changed on the month in December and therefore still much lower than at the start of 2011, mainly helped by reduced cost pressures at manufacturing companies. Service providers meanwhile continued to report relatively strong rises in their costs, which they primarily linked to greater utility bills and staff wages.

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