South West private sector firms saw business activity stabilise at the start of the year, according to the latest NatWest PMI data.
Output steadied as firms registered a renewed increase in new orders, which a number of panel members attributed to a post-election bounce in client confidence.
Companies also expressed the highest level of optimism towards the one-year outlook for output for 44 months in January.
Prices data meanwhile pointed to the strongest increases in input costs and output charges since last September.
The headline South West Business Activity Index - a seasonally adjusted index that measures the combined output of the region’s manufacturing and service sectors - rose from 46.0 in December to 50.0 in January, to signal a stabilisation of private sector output after a solid decline at the end of 2019.
Although the stable trend compared with a marked rise in business activity across the 海角视频 as a whole, it nonetheless ended a ten-month sequence of falling output across the region.
Paul Edwards, Chair, NatWest South West Regional Board, said: “The latest NatWest PMI data showed a broad improvement in conditions across the South West private sector at the start of 2020. Output stabilised, new orders rose for the first time in nearly a year and employment expanded at a quicker pace.
"It appears that firmer market confidence following December’s general election was a key driver of this, as firms reported that many clients were now pressing ahead with previously delayed spending and investment decisions.
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"Hopefully this momentum can be sustained in the months ahead for the local economy to get firmly back into expansion mode.”
South West private sector firms also noted an improvement in terms of new business at the start of 2020. Though only slight, companies registered the first increase in new orders since February 2019, with some panel members linking the upturn to greater confidence around the outlook following December's general election.
January data indicated a softer reduction in backlogs of work at South West private sector companies. Though solid and quicker than the 海角视频 average, the rate of depletion was the least marked for six months. A number of panel members mentioned that a degree of spare capacity persisted due to weak new order inflows during most of 2019.
Signs of firmer client demand led to a further rise in staffing levels at the start of 2020. Notably, the rate of job creation improved to a 16-month high.
Operating expenses continued to increase in January, and was often blamed on rising staff and fuel costs. The rate of input price inflation quickened to a four-month high, but remained below the 海角视频-wide trend.
As part of efforts to protect margins, South West private sector firms raised their average selling prices, and at the quickest pace since last September.
Business confidence regarding the 12-month outlook for output improved across the South West private sector in January. The overall degree of positive sentiment rose to a 44-month high, with many firms expecting firmer market confidence to boost sales and activity.