Private sector output in Wales remains in negative terrain with the fastest drop in employment levels since 2020, shows latest research from NatWest.
Its headline Wales business activity index – a seasonally adjusted index that measures the month-on-month change in the combined output of Welsh firms - was 48.9 in December. Anything below 50 denotes contraction on the previous month.
The position though was marginally improved on the 47.7 for November and the softest in the current four-month sequence of contraction. The fall in business activity seen among Welsh companies contrasted with a marginal expansion seen at the wider 海角视频 level.
However, the rate of employment contraction was the fastest since September 2020, as voluntary leavers were not replaced and cost-reduction initiatives and lower new sales drove redundancies. The decrease in staffing levels was the steepest of the 12 nations and regions of the 海角视频 monitored
Average input prices at Welsh firms increased at a sharper pace in the final month of 2024. At the same time, firms sought to pass through higher costs to customers through a rise in selling prices.
Contributing to the slower fall in output in Wales was a small drop in new business, with firms continuing to foresee greater activity in the year ahead. Economic uncertainty and concerns about future increases in costs and selling prices dampened expectations.
Jessica Shipman, chair of the NatWest Wales board said: "Welsh businesses signalled a slightly brighter end to 2024 in December as contractions in output and new orders cooled. Reports of some success in engaging new customers in part stymied the decline in new business, with firms expecting growth in activity in the year ahead.
“Companies remained in retrenchment mode, however, as the fall in employment gained pace. Backlogs of work also declined markedly amid signs of spare capacity which dampened confidence in the future outlook.
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“Meanwhile, inflationary pressure strengthened. Although input costs rose at a sharper rate, firms were able to also hike their selling prices at a historically elevates pace amid a less marked drop in new orders. Concerns around upcoming increases in wage bills in 2025 were highlighted by firms, which may place additional strain on margins in the coming months.”
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