North-west economy continues to bounce-back from Covid-19 despite slowdown in rate of growth

While the region’s economy has continued to grow after the Covid-19 restrictions were eased, the rate of growth has dipped in the North-west according to the latest monthly data from NatWest.

The rate of recovery has slowed since May, when the high street bank’s North-west PMI survey recorded the fastest growth in the region since 1997 when the monthly survey launched.

Richard Topliss, Chairman of NatWest North Regional Board, explained:

“The health of the North West private sector continued to improve in July, albeit with the latest data pointing to a general slowdown in growth compared to the situation in the previous couple of months. This isn’t entirely surprising, however; as we get closer to pre-pandemic levels of output, the pace of recovery is naturally going to slow. But in some cases, activity is being held back by supply constraints. We continue to see the broad effects of this in sharply rising input costs, which in turn poses some risk to future demand as companies pass on higher costs through price increases of their own.

“However, with almost all restrictions now lifted, firms remain strongly optimistic about the outlook and we’re seeing this reflected in a sustain rebound in local employment.”

In addition to continued economic growth in the region, the latest economic data from NatWest also showed employment rates continued to rise during July, with a fifth consecutive month of job creation in the region. Firms (particularly manufacturers) reported taking on additional staff to cope with rising workloads as the economy reopens.

Exports and new orders also continued to rise for North-west businesses; however, many also reported that delays to the supply of materials had led to difficulty keeping up with demand.

The NatWest North West PMI® is compiled by IHS Markit from responses to questionnaires sent to North West companies that participate in IHS Markit’s UK manufacturing and services PMI surveys.