HOPES that East Anglia is recovering from recession were lifted yesterday by a survey showing that employ-ment in the region increased in March for the first time in nearly two years.

HOPES that East Anglia is recovering from recession were lifted yesterday by a survey showing that employ-ment in the region increased in March for the first time in nearly two years.

Data contained in the latest Markit purchasing managers' index suggests that the East Anglian economy's recovery accelerated last month, with new businesses growing at the fastest pace in eight months.

Employment has risen for the first time since April 2008, albeit only slightly, with the increase in staffing levels being driven by the manufacturing sector.

Across the UK economy as a whole, employment did not increase last month but private-sector activity grew.

Input costs for companies in the East of England have continued to increase sharply, and output prices have also risen each month since September 2009, with the latest increase the fastest in a year and a half.

Although still slightly below the UK average, strengthening demand saw the number of new orders and output rise for the eleventh consecutive month in the region with the business activity index reaching 55.3 in March, up from 53.9 the previous month.

Chris Starkie, chief executive of the economic partnership Shaping Norfolk's Future, said: “The report shows businesses in the region are continuing to recover, with rising order books, particularly in the manufacturing sector.

“But increased fuel prices could well slow down the pace of recovery. Things are looking brighter, but we're not out of the woods yet.”

Celia Hodson, chief executive at investment and business group Choose Suffolk, added: “There is some really encouraging news for the East of England and there is some strong evidence that the region is well positioned to continue emerging from the recession.

“Although output continued to rise less quickly than the UK economy average, we are seeing evidence of a definite increase in new order growth which suggests that this divergence between the East of England and the UK in general is beginning to narrow.

“Expansion of a number of key Suffolk companies has also seen an increase in employment. Collectively these economic factors bode well for the future, alongside an increased interest from niche businesses and organisations.”

The signs that the economy is continuing to pick up were strengthened by figures published yesterday by the British Retail Consortium (BRC) and KPMG which showed that the total value of retail sales surged by 6.6pc in March - the strongest growth since April 2006.