December saw another month of business activity growth across Wales, despite firms reporting a record rise in prices charged for goods and services, according to the latest Lloyds Bank UK Regional Purchasing Managers’ Index survey.

The Wales PMI rose from 57.3 in November to 57.4 in December. A reading above 50 signifies growth in business activity.

That signalled the biggest monthly increase in business activity since June 2015, with Wales’ rate of growth continuing to outpace the UK 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 December compared with a month earlier.

Encouraged by strong demand for their goods and services, companies continued to recruit new staff. However, the rate of job creation eased from November’s 16-month high.

The continued weakness of the pound against the US dollar contributed to the sharpest rise in Welsh firms’ costs - including raw materials, utilities and wages - in almost eight-and-a-half years, which led to businesses raising their prices.

Allan Griffiths, regional director for SME Banking, Lloyds Bank Commercial Banking, said: “It was a positive end to 2016 for companies in Wales. Business activity grew at the sharpest pace in 18 months and continued to outperform the UK average during December.

“However, continued weakness of the pound versus the US dollar meant more pressure on costs, and with further US rate hikes in 2017 likely to strengthen the dollar further, we may see costs and prices rising again in the months ahead.”