North West business activity returned to growth in April

Despite the challenges of rising inflation, businesses in the North West saw a rise in activity in April, reversing the previous month’s decline, according to a business survey by NatWest.

The NatWest Growth Tracker’s headline North West Business Activity Index – which measures changes in the region’s output of goods and services – moved back above the 50.0 threshold that separates growth from contraction in April, rising from 48.7 in March to 50.5. The result meant that business activity has now increased in three of the past four months, albeit only slightly in each case.

Greater optimism among customers was reportedly a factor that helped support higher activity.

Although firms reported challenges securing new work, they were optimistic about growth prospects in the coming year, and more so than in March; business expectations were at their highest for nine months. This is in stark contrast to the fact that firms’ overall operating expenses rose at the quickest rate for nearly four years, with the pace of inflation having posted a record acceleration for the second month running.

Malcolm Buchanan, Chair of the NatWest North Regional Board, said:

“An upturn in business activity in April, alongside a recovery in business confidence, points to some resilience in the North West private sector.

“That resilience looks set to be tested in the coming months, however, amid a backdrop of geopolitical uncertainty and rising inflationary pressures.

“The increased prices of fuel and commodities has helped push up businesses’ costs at a rate not seen for nearly four years, which has in turn led to sharp rises in goods and services prices as inflationary pressures emanate through the economy. With firms looking to contain costs the best they can, we’re seeing efforts to improve productivity.”