Business activity in the South West plummeted last month in the biggest rate of decline seen since 1997, a new report finds.
There was a substantial fall in the region’s private sector output in March following the Covid-19 outbreak, according to the latest NatWest PMI survey data.
The headline South West Business Activity Index, a seasonally adjusted index that measures the combined output of the region’s manufacturing and service sectors, fell sharply from 50.2 in February to 36.7 in March.
The marked drop in output was driven by a substantial reduction in new business across the South West with the rate of contraction for new orders the steepest seen since December 2008.
The decline was widely linked to the coronavirus outbreak, which saw many companies' clients cancelling or delaying orders.
Concerns over the length and severity of the pandemic also undermined business confidence, which fell to the lowest level since the latest data series started in mid-2012.
At the same time, lower new order intakes resulted in spare capacity, with backlogs of work falling sharply.
A lack of incoming new work also contributed to a reduction in employment across the region during March. Companies often mentioned the non-replacement of voluntary leavers and redundancies due to weaker demand conditions.
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Added to this, average cost burdens across the South West private sector rose at the slowest rate since June 2016 at the end of the first quarter.
As part of efforts to stimulate client demand, prices charged by South West private sector firms fell in March. Though modest, it was the first time that businesses had discounted their selling prices for just over four years.
“The outbreak of the Covid-19 pandemic had a widespread impact on the 海角视频 economy in March," said Paul Edwards, chair of the NatWest South West regional board.
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"In the South West, business activity fell at the quickest rate in over two decades of data collection amid a marked drop in client demand.
"As a result, business confidence in the region fell to a fresh series low and firms cut back on staffing levels as they became increasingly concerned over the length and severity of the pandemic."