'The Eastern England private sector economy made a positive start to 2007, as the rates of growth of business activity and new orders remained robust,' said Thorsten Fischer, Senior Economist at the Royal Bank of Scotland,
'Eastern England's economy starts the new year at a trot'
commenting on the release of January's PMI Business Survey Data, produced for The Royal Bank of Scotland by NTC Economics.
'Employment and backlogs of work also continued to rise, albeit at a slower pace. Input price pressures remained intense, but a marked increase in output charges has helped companies to protect margins,' he added.
Data from the Eastern England PMI Report pointed to a further robust expansion of the private sector economy in January. At 56.0, the seasonally adjusted Business Activity Index pointed to a robust increase in output.
New orders increased at Eastern England firms for the twentieth consecutive month pointing to further growth ahead. Reports from firms suggested that the launch of new product lines and an improvement in underlying demand contributed to new work growth.
Eastern England firms' backlogs of work rose modestly in January, in large part due to higher new order levels and longer supplier delivery times. Outstanding business volumes have now expanded in each month since May 2006.
Staffing levels rose at Eastern England firms for the tenth consecutive month in January. Anecdotal evidence suggested that workforces expanded as part of efforts to increase capacity in response to higher levels of demand. The fact that firms continue to hire underscores their confidence that the expansion has staying power.
Eastern England companies recorded a further sharp increase in input costs in January, with firms reporting higher staff salaries and raw material prices.
Higher input costs underpinned a marked increase in prices charged. Output prices have now risen for fifteen consecutive months and the latest increase was sharper than the average for the current inflationary period. Increased pricing power has helped firms to protect margins.
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The Royal Bank of Scotland is a major financial services group providing a range of retail and corporate banking, financial markets, consumer finance, insurance, and wealth management services. Locally RBS has a strong presence in the technology sector.