Employment levels in Wales rose sharply during January as business activity across the country expanded at the quickest rate since March 2015, according to the latest Lloyds Bank UK Regional Purchasing Managers Index (PMI).
The Wales PMI rose from 57.4 in December to 59.6 in January and signalled a faster rate of expansion than across the UK as a whole (55.5). A reading above 50 signifies growth in business activity, whereas below 50 signals contraction.
Encouraged by an expansion in new business, companies took on additional staff members at the fastest rate since May 2015.
The weak pound contributed to the biggest rise in costs – which include raw materials, utilities and wages – since August 2008.
As a result, Welsh firms passed these costs on to customers in the form of raised prices for goods and services, which increased at a sharp rate that was close to December’s record high.
The Lloyds Bank PMI, or purchasing managers’ index, is the leading economic health-check of UK regions. It is based on responses from manufacturers and services businesses about the volume of goods and services produced during January compared with a month earlier.
Allan Griffiths, regional director Wales at Lloyds Bank Commercial Banking, said:
“Welsh companies had a great start to 2017, with increases in client demand, business activity and recruitment levels meaning that it was one of the best performing areas of the UK.
“Despite this, cost pressures continued to have an effect on companies across the region and, although they remain resilient for now, it’s vital that businesses have plans in place to ensure that they are prepared for any future challenges.”