The East Midlands has seen further contractions in industrial output and new orders, with employment growth slowing according to latest industry figures.
The most recent NatWest East Midlands Business Activity Index suggests the quickest decline in output across the East Midlands private sector since January 2021.
Anecdotal evidence suggests that the strong decrease in business activity was due to weak client demand and reduced purchasing power from customers as rising inflation and fears over energy bills continued to bite.
New PM Liz Truss hopes her new measures to ease the burden of energy bills for both households and businesses will go somewhere towards making life easier 鈥 and slowing the rate of inflation 鈥 as the winter approaches.
The NatWest survey for August showed the rate of economic contraction was faster than recent averages, as manufacturers and service providers across the region recorded a fall in output.
The rate of decline quickened from July to the fastest since May 2020, with bosses saying the decrease in new business was linked to reduced purchasing power by customers amid strain on disposable income.
The August data also signalled an historically muted degree of confidence in the outlook for output over the coming year across the East Midlands. Although upbeat overall, the level of optimism was the second-lowest since May 2020 as concerns regarding pressure on customer spending and higher prices weighed on sentiment.
Output expectations across the region remained weaker than the 海角视频 average although firms in the East Midlands continued to register an increase in employment midway through the third quarter. A
Anecdotal evidence stated that greater workforce numbers were due to the filling of long-held vacancies, although the rate of job creation eased to the slowest in almost a year.
NatWest said: 鈥淎verage input costs at East Midlands private sector firms increased at an historically elevated pace during August.
鈥淗igher operating expenses were attributed to greater energy, fuel, materials and wage costs.
鈥淎lthough much sharper than the series average, the rate of cost inflation softened to the slowest since May 2021 amid reductions in some material prices.
鈥淓ast Midlands private sector firms signalled another substantial increase in output charges midway through the third quarter.
鈥淪urvey respondents stated that higher selling prices were due to the pass-through of greater costs to clients. The rate of charge inflation eased, however, and was the slowest since September 2021.鈥
John Maude, who sits on the NatWest Midlands & East Regional Board, said: 鈥淓ast Midlands firms signalled more challenging business conditions during August, as pressure on customer disposable incomes dampened spending and led to faster contractions in output and new business.
鈥淐lient demand slumped, as new orders fell at the sharpest pace since the initial Covid-19 lockdown in May 2020.
"Lower new orders led firms to favour cost-cutting efforts, as employment rose at the slowest pace for almost a year. Although picking up from July, the degree of confidence in the outlook was the second-lowest for over two years as inflationary concerns weighed on sentiment.
鈥淎ugust saw slower increases in business expenses and charges for goods and services. Nevertheless, inflationary pressure remained historically elevated amid soaring material and energy bills.鈥
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