NatWest North West business survey reveals third month of downturn

Business activity in the North West has fallen for a third consecutive month in October, according to the latest NatWest Regional PMI survey data of firms in the region.

Despite the fall, the region remains among the most optimistic for future performance of all UK regions and nations, which was further reflected by a rise in employment. Businesses in the North West cited confidence around marketing plans and new product launches, but reported low consumer confidence in the economy, cost of living pressures and high interest rates were hampering sales.

In October, NatWest’s headline Business Activity Index for the region remained below the 50.0 no-change threshold for a third straight month; however, following back-to-back readings of 47.2, the index rose to 48.5 to signal a more modest rate of decline.

NatWest’s figures follow the ONS’ latest economic data, which saw no change to UK GDP in the third quarter of 2023, in line with Bank of England estimates that growth will remain stagnant.

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

“The latest PMI survey signals that business conditions remain challenging, but also that there’s a degree of resilience being shown by local firms. Demand continues to be constrained amidst a backdrop of economic uncertainty, cost of living pressures and high interest rates, which has led to a third straight monthly decline in business activity. However, business confidence in the region is more or less in line with its long-run average and among the highest nationally, whilst local firms are still showing a willingness to take on new staff. Elsewhere, the survey’s measures of business costs and output prices pointed to faster rates of inflation, likely reflecting the impact of the recent upturn in global oil prices.”