Rising prices hurt growth at North-west businesses

Rising prices has seen the rate of growth slow in the North-west according to NatWest’s latest Purchasing Managers Index (PMI) survey of the region’s businesses.

NatWest’s March PMI data showed businesses in the region were reporting a record increase in the prices they were charging to customers for both goods and services as a result of rising costs. As a result, the high street bank’s North West Business Activity Index stood at 56.9 in March, just slightly up on February’s 56.7 figure, despite all Covid-19 restrictions coming to an end, and below the average growth rate of 60.9 being recorded across the whole of the UK.

Despite this, the region remains one of the most optimistic about the future economic picture, particularly following the coronavirus pandemic, albeit dimmed slightly by uncertainty around the ongoing Russian invasion of Ukraine.

Hiring intentions and new job creation continued to rise in March, with growth in new jobs climbing in the region to its fastest in five months.

Richard Topliss, chairman of NatWest North Regional Board, said:

“Businesses across the North West enjoyed a sustained robust recovery in activity in March, amid signs of demand continuing to pick up after the Omicron-induced slowdown around the turn of the year.

“It was also encouraging to see local firms remaining in hiring mode, despite coming under increased pressure from escalating costs, with employment levels continuing to rebound strongly.

“To try to offset sky-rocketing costs, businesses raised their own prices at a rate unseen for more than 20 years, painting the picture of a broad inflationary environment. Although businesses remained confident about their growth prospects in the year ahead, geopolitical uncertainty and soaring inflation has started to dampen optimism.”