Business activity in the north west has fallen for the first time in three years.
That’s according to the latest NatWest PMI data, which revealed a drop in combined output of the manufacturing and services industries for the first time since the immediate period following the EU referendum result in 2016.
The NatWest north west business index fell from 50.2 in July to 47.1 over august, largely driven by the manufacturing sector.
The regional contraction contrasts with a marginal upturn experienced across the 海角视频 as a whole, the report said.
Nick Stamenkovic, NatWest senior economist, said: “It’s clear over the last three to six months the pace of business activity in the north west has been moderating and it looks like it has succumbed to negative impacts, not just affecting the north west that’s affecting many regions of the 海角视频 economy.
“We have had some leading indicators over the last two months start to deteriorate, notably new orders.
“It has been resilient for a long time but it now seems to be succumbing to factors, not just domestically but overseas as well.”
Mr Stamenkovic said that it is not just Brexit uncertainty impacting the region’s manufacturing sector.
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He said: “Brexit-related uncertainty is clearly not helping and we see evidence of that in many 海角视频 regions, but also the overseas picture is worsening.
“Germany could go into recession in the third quarter of 2019, the Chinese economy is slowing and in the US, economy is starting to moderate.”
According to survey respondents, a weakening exchange rate with the US dollar was a key factor inflating cost pressures, the report stated.
The north west economy’s reliance on the manufacturing sector was why the region suffered a downturn in business activity, Mr Stamenkovic said.
“We’re seeing a mixed picture for the northern powerhouse, but overall the business activity in the northern powerhouse has slowed and is moving towards contraction territory if it’s not there already,” he said.
The region experienced a marginal upturn in employment, the weakest increase in 16 months, however the report said the north west outperformed the 海角视频 as a whole.
New business was also down in August for the fourth month in a row, but was “the most marked” decline for three year, the report said.
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The region had the second largest fall in sales over August, behind Northern Ireland.
While the report said firms were “generally positive” when in future outlook, Brexit uncertainty “subdued the overall outlook”.
Mr Stamenkovic said: “Manufacturers and companies in general are very uncertain about the future due to Brexit.
“If we get a smooth exit, then the adverse impacts will be somewhat limited but if we get a disorderly exited, the bank estimates that the fall in activity from peak to trough could be as much as 5 per cent GDP.
“So, depending on what outcome we get on Brexit, it will have ramifications to the extent of the impact on both output and employment and until we see that clarified, companies remain naturally on cautious mode.
“He added: “However, I stress it’s not just Brexit, it’s because the global picture is worsening as well, so it’s a combination of factors which are pushing down activity and confidence in the north west region.”