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THE North East saw business growth slow last month despite a solid rise in new orders, according to new research.

But the growth rate is still above the UK average and output prices continued to be robust, said the latest Lloyds TSB North East Purchasing Managers’ Index.

Manufacturing remained the principal driver of growth and companies said they were growing because of a rise in demand and their own efforts to break into new markets. New order levels have now risen continuously for nearly two years.

Employment growth slowed to a three-month low in May, but remained solid. Firms stated that workers were recruited to meet the needs of higher activity levels. Manufacturers took on extra staff at a sharper rate than service companies.

Martyn Kendrick, area director for Lloyds TSB Commercial in the North East, said: “In line with the general trend seen throughout the UK, North East private sector output growth slowed further during May. “This was despite a further solid rise in new business. Companies indicated that the additional Bank Holiday at the end of April/beginning of May had contributed to the weaker rise in activity.

“Although job creation in the region also slowed since April, it is encouraging that it was still one of the most pronounced in the UK.

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