The North East economy saw its first increase in activity for 10 months but remains one of the weakest performing in the 海角视频, according to an influential business survey.
The NatWest North East PMI Business Activity Index, which measures month-on-month change in the region’s manufacturing and service sectors, jumped from 47.5 to 50.2 in March. This was the first increase in activity for 10 months but still the second lowest ranking of the 12 海角视频 regions, with only Yorkshire and Humber seeing a downturn.
The survey found that new business for businesses in the region fell again, marking nearly a year of successive monthly declines in demand for North East goods and services. Companies polled linked the drop in demand to the 海角视频’s challenging economic conditions and subdued customer confidence.
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But there was more positive news as companies increased staffing levels in March, with the increase in headcounts being the first seen in nine months. Cost burdens facing firms in the North East increased further in March, continuing a trend of rises which began in 2020, with transport costs particularly highlighted as a concern. Firms generally passed their rising costs on to their customers. Despite those challenges, firms were broadly positive for the year ahead, though at the lowest level in the 海角视频.
Malcolm Buchanan, chair of the NatWest North regional board, said: “Though operating conditions remained tricky for North East private sector companies and tougher than in most other nations or regions, the NatWest Regional PMI data for March saw some faint glimmers of hope. A positive reading for activity was recorded for the first time since last May, while new business remained only just inside negative territory. On both scores, however, the North East was near the bottom of the regional rankings, above only Yorkshire and Humber.
“Yet, North East firms took on new workers in March, after having made cuts in the previous eight months. That said, the rise in workforce levels across the North East was only fractional. Overall sentiment towards future activity was slightly more positive in March, albeit still weak compared to the historical trend.”
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The survey comes just a few days after the quarterly economic survey from the North East Chamber of Commerce reported a similarly mixed picture. That report highlighted an overall decrease in business concerns, but outlined how business rates, energy prices and staff costs had all increased as areas of unease since the end of last year.
Further insights into the region’s economic health will come this week as official figures are released on inflation and regional unemployment.