Business activity fell in the South West during August across the private sector economy.
The latest PMI report fromNatwest highligted that emplyment has falled for the second month running anf new business is declinded at a quicker pace.
Conditions deteriorated further in August, as business activity and new orders continued to contract, but a lack of incoming new work enabled firms to reduce their level of outstanding business and at a solid pace, despite a further drop in staff numbers.
Operating expenses meanwhile rose sharply, largely due to the weaker sterling exchange rate. However, relatively subdued demand conditions underpinned the softest increase in output prices for nearly a year-and-a-half.
The headline South West Business Activity Index - a seasonally adjusted index measures the combined output of the region’s manufacturing and service sectors - remained below the neutral 50.0 mark at 49.3 in August, to signal the sixth successive monthly fall in business activity across the region.
That said, the reading was up from a multi-year low of 48.6 in July, to signal only a marginal reduction overall. Across the 海角视频 as a whole, business activity growth eased to a fractional pace.
Softer demand conditions were often linked to the sustained drop in output during August. Notably, the amount of new orders received by South West private sector firms declined at the second-steepest rate for just over three years. Companies indicated that clients were unwilling to commit to new projects due to heightened political and economic uncertainty.
The decline in new work was quicker than that seen at the national level, with both manufacturers and service providers in the region noting lower sales.
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Backlogs of work at South West private sector companies declined at the steepest rate since March 2013. Firms widely linked the fall to a lack of incoming new orders.
Signs of spare capacity and subdued client demand contributed to a further reduction in staff numbers in August. That said, the rate of job shedding remained marginal overall.
Average input costs continued to rise sharply across the South West private sector economy, with the rate of inflation quickening to a four-month high. Panel members widely linked the increase to a weaker sterling exchange rate and higher raw material prices.
Despite the stronger rise in operating expenses, output charge inflation edged down to its lowest for 17 months.
Businesses in the South West signalled a stronger level of optimism towards the one-year outlook for output. Confidence improved to its highest since May amid hopes of stronger market conditions if Brexit-related uncertainty subsides.
Chris Preston, Chair, NatWest South West Regional Board, commented: “The latest NatWest PMI data show that the South West private sector economy remained under pressure in August, with business activity declining for the sixth month running.
The outlook looks relatively bleak, as new order intakes fell at the second-quickest rate for over three years, while firms cut their staffing levels for the second month running. At the same time, prices data showed a further squeeze on profit margins, with input cost inflation continuing to outpace that seen for selling prices.
“As political and economy uncertainty continue to weigh on overall demand conditions, unless there is greater clarity over Brexit and a meaningful recovery in market confidence, it seems unlikely the region will recover in the near-term.”