February saw a marginal rise in business activity across the Midlands according to a report from Lloyds TSB.
The latest Lloyds TSB West Midlands Business Activity Index – which measures the combined output of the region’s manufacturing and service sectors – registered 50.7, up slightly from 50.1 in January.
Higher activity was supported by a further rise in the level of new orders received by companies.
Backlogs of work continued to be depleted at a considerable pace, in part supported by another increase in employment.
Input prices rose at the sharpest rate in nine months, whereas output charge inflation eased to only a marginal pace.
Following broadly stagnant output in the first month of 2013, business activity at West Midlands private sector firms increased slightly during February. That said, the rate of growth was marginally below the UK average. Manufacturers continued to register sharper activity growth than service providers.
The level of new business placed with private sector firms in the West Midlands was up for the fourth month running in February.
There were reports from the survey panel that new order growth had been supported by the launch of new products and increased activity levels at clients.
Staffing levels at private sector companies in the West Midlands increased for a second successive month in February. Although moderate, the rate of jobs growth was the fastest since last August. Net hiring was recorded in both the manufacturing and service sectors.
Higher employment contributed to a further drop in the level of outstanding business at the region’s firms. Backlogs of work fell for the tenth month in succession, and at a marked pace.
Andy Youngman, area director for Lloyds TSB Commercial Banking in Birmingham, said: “Firms across the West Midlands saw only marginal output growth in February, largely driven by another modest rise in new orders and a faster expansion of employment numbers.
“However, another marked drop in backlogs of work highlighted ongoing spare capacity among businesses in the region.
"Prices paid by companies for goods and services continued to rise, partly as a result of sterling’s recent depreciation against the euro, with cost inflation rising to a nine-month high.”