A renewed decline in business activity in January signalled a difficult start to the new year for firms across the North West, according to the latest Regional PMI® data from NatWest.
However, the survey signalled increased optimism from local businesses towards the year ahead outlook and continued to take on additional staff, amid further signs that cost pressures had passed their peak.
The headline North West PMI Business Activity Index – a seasonally adjusted index that measures the month-on-month change in the combined output of the region’s manufacturing and service sectors – slipped back into sub-50 contraction territory in January, dropping from 50.0 in December to 47.2.
The latest reading marked the fourth decrease in business activity in the past five months, and a rate of decline that was the quickest for two years. The downturn was led by weakness in manufacturing output, underlying data showed.
Malcolm Buchanan, chair of NatWest North Regional Board, said: “January’s PMI survey results were somewhat of a mixed bag, revealing both positive and negative developments across the North West economy at the start of the new year. Starting with the not-so-good news, we saw business activity return to contraction after briefly stabilising in December, with demand continuing to be strained by a combination soaring prices and tightening financial conditions.
“However, whilst remaining elevated, businesses’ cost pressures continue to subside, boding well for the prospect of lower inflation in the coming months. Positively, local firms have grown in confidence about the outlook, which has in turn led to resilience in the labour market as firms continue to fill vacancies.”
Source: Insider Media