Business activity in Wales has declined at its fastest rate for almost a year.
The latest NatWest Wales PMI data, which measures month-on-month change in the combined output of the manufacturing and service sectors, registered 40.8 in January, down from 49.9 in December. Anything below 50 denotes contraction.
The pace of decrease was the fastest since May 2020 and was among the sharpest of the 12 monitored 海角视频 areas, behind only Scotland, Northern Ireland and the North West of England.
Welsh private sector firms signalled a further robust degree of confidence regarding the outlook for output over the coming year in January.
Although the report found that the level of optimism dipped slightly from December, it was higher that the long-run series trend. Positive sentiment reportedly stemmed from hopes of a successful vaccine roll-out and a pick-up in client demand once restrictions ease.
The January data also indicated a sharp decline in employment across the Welsh private sector. The rate of decrease quickened to the fastest for three months and was the steepest in the 海角视频.
Welsh private sector firms registered a third successive monthly decrease in backlogs of work at the start of 2021. The pace of decline eased, however, as some companies noted longer lead times for key components and inputs.
Average cost burdens rose markedly in January. The increase in input prices was often linked to higher raw material and shipping costs, with some also mentioning additional surcharges in transportation following Brexit. The pace of cost inflation was much quicker than both the long-run series and 海角视频 averages.
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January data signalled only a fractional rise in output charges at Welsh private sector firms.
Kevin Morgan of the NatWest Wales, board said: “Welsh private sector firms once again felt the impact of the national lockdown as reports of businesses temporarily closing hit client demand. Renewed contractions in output and new orders were registered as concerns regarding short-term economic conditions led companies to cut workforce numbers at a sharper rate.
“Of further concern was a significant rise in input prices as the rate of cost inflation accelerated to the fastest since June 2018. Greater raw material, input and transportation costs were widely linked to the increase. Weak demand conditions held firms back from passing these costs on to their clients as selling price rises were limited in an effort to drive sales.
“Nevertheless, Welsh companies remain robustly optimistic that output will rise over the coming year.”