North-west economy continues to grow, finds NatWest business survey

High street bank, NatWest, has revealed the North-west saw its economy continue to grow in April according to its monthly Regional PMI survey.

NatWest’s headline Purchasing Managers Index (PMI) rose to 54.0 in March for the North-west region, up from 52.7 in April, representing stronger levels of growth in the region’s businesses – a figure above 50 indicates growth in the economy, while figures below show contraction in the economy. The bank’s survey found growth to be at its fastest rate for two years.

Despite high growth, optimism for the future fell slight on March’s PMI survey findings, however, it remains high, bolstered by market confidence and increased export sales. Employment data declined slightly for the first time in four months, largely from job losses in manufacturing, but was broadly unchanged across the UK as a whole. Businesses also reported increases in inflows of new businesses, although backlogs of work continued to fall.

Businesses also showed continued cost pressures contrary to falls in headline inflation across the economy. NatWest’s survey found businesses reported increases in both energy and raw material costs, as well as facing significant pressure from April’s increase in the National Living Wage driving up wage costs. Nevertheless, average prices charged by firms rose more slowly in April, with output price inflation at its slowest rate in more than three-and-a-half years.

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

“The recovery in the North West private sector gained momentum in April as business activity growth accelerated to its fastest rate in two years.

“Encouragingly, a sustained upturn in new business in the region points to a strengthening of underlying demand and is fuelling hope among firms that activity can continue rising over the coming year.

“Cost pressures do, however, remain an issue with the data suggesting that output prices are not keeping pace with those input costs.”