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Welsh Firms Ramp-up Prices at Fastest Rate Since Records Began

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Welsh firms increased the prices they charge for their goods and services at the fastest rate ever recorded in April, as they moved to pass on higher costs caused by the ongoing weakness of the pound and larger wage bills.

The latest Lloyds Bank UK Regional PMI survey showed that Welsh firms increased their average selling prices at the fastest rate since records began in 2001, more than 16 years ago.

The level of business activity in the Welsh private sector economy continued to increase during the month, boosted by further growth in new orders and employment. Having slowed substantially in the previous two months, the rate of growth was unchanged and solid during April.

Employment levels continued to rise as firms looked to raise capacity to meet higher client demand, and the rate of job creation accelerated from March.

The Wales PMI was 53.6 in April, unmoved from March, and signalled another solid rate of growth in business activity, albeit at joint-weakest in the current nine-month run of growth. The rate of growth also remained below the UK economy average.

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 April compared with a month earlier.

Commenting on the Lloyds Bank Commercial Banking Wales PMI survey, Allan Griffiths, regional director for Wales, Lloyds Bank Commercial Banking said;

“Business activity in the Welsh private sector continued to rise in April, buoyed by a further expansion in new orders. In turn, this contributed to another increase in staffing numbers as firms looked to enhance their operating capacity to cope with higher client demand.

“April meanwhile saw the sharpest monthly growth in average prices charged for goods and services since records began.  

“The recent slowdown in business activity growth can be partly attributed to sharp inflation squeezing customer purchasing power. Meanwhile, political uncertainties including the UK general election may also be weighing on growth.”

Historical Overview

Sources: Lloyds Bank Commercial Banking, IHS Markit.