NatWest reveals fifth consecutive rise in business activity in the North West in June PMI survey

Firms in the North West recorded a fifth consecutive monthly rise in business activity in June, according to the latest NatWest UK Regional PMI survey.

Despite the continued uplift in activity, the rate of growth eased to its slowest level since March following a drop in inflows of new work, with the Index at 52.0 for June, down from 52.3 in May (an index below 50 indicates negative growth). The North-west economy was also performing worse than the UK average (52.8), with expansion in the service sector offsetting falling output from manufacturers.

Business confidence, however, remains strong: firms anticipating a rise in activity in the coming year commented on plans for new products and greater marketing, alongside hopes of a general upturn in demand.

The rate of job creation by businesses in the region was also at its fastest in the past nine months, although underlying data shows hiring by services firms has offset job losses in the manufacturing sector.

A more positive outlook by firms in the North-west is likely to be being buoyed by the findings of the June PMI survey that inflationary pressures impacting businesses in the region were easing. The rate of input cost inflation faced by firms in the North West resumed its slowing trend in June, with manufacturers particularly commenting on falling material prices. Overall cost pressures do remain at historically strong levels.

Malcolm Buchanan, Chair of NatWest North Regional Board, commented:

“The North West economy continued to tick along in June, registering a fifth straight monthly rise in business activity. A weakening of growth and back-to-back falls in new business are somewhat of a concern, but business confidence did pick up in June to suggest that firms view any slowdown as only temporary. Indeed, a steady rise in employment points to the fact that businesses are still willing to hire in the current environment. Although inflation remains high, we’re seeing things on this front improve as the rates of increase in firms’ input costs and output prices slow, dropping to their lowest since early-2021 in June.”