Business activity in the East of England private sector rose strongly in November and firms recruited staff at the fastest rate of any UK region, according to a survey of purchasing managers. But extra staff costs meant that cost inflation picked up to its highest level for four months.

The Lloyds Bank East of England business activity index rebounded from October’s 16-month low of 56.9 to post 58.6 in November, outperforming the UK average. Growth was driven by new contract wins, new product launches and additional capacity. Services grew faster than manufacturing.

New business rose at a quicker pace in November helped by new contract wins from home and export markets.  Firms hire extra staff for the twenty-fourth month running and outstanding business increased in November. But the growth of backlogs was modest. Cost inflation picked up despite falling transport and commodity prices with reports of extra staff costs.

Steve Elsom, area director for SME banking in the East of England, Lloyds Bank Commercial Banking, said: “Private sector business conditions in the East of England improved in November, supported by stronger output and new business growth. This helped employment to rise at the sharpest pace of all the regions. Although cost inflation rose at the strongest rate for four months, and firms should be wary of this, prospects for growth in the East of England remain bright.”

…as confidence in jobs market rebounds

Confidence in the region’s job market has rebounded in the fourth quarter according to a survey by Manpower. After a dip last quarter, it says the employment outlook in the East has bounced back to +7 per cent, in line with the national average, as firms recruit more permanent workers. Krissie Davies, operations director at Manpower UK said: “…as we head into 2015, it is very encouraging to see that the region is bouncing back and that confidence is filtering through the marketplace.”  The Manpower survey points to strong demand for telesales and administrative staff in Chelmsford and for skilled workers in Ipswich. It says candidates are selecting roles based on prospects rather than pay.