The output of the private sector in Wales has expanded for the sixteenth consecutive month, however that rate of growth has started to wane.
New research from NatWest’s Wales Business activity index - which measures the month-on-month change in the combined output of the manufacturing and service sectors - registered 53.6 in June.
This fell from May's reading of 56.1, however it still remains in positive territory as anything below 50 signals a contraction.
The rate of increase in activity was broadly in line with that recorded for the 海角视频.
Private sector firms in Wales registered a mild increase in new business in June, with some linking growth in business activity to sustained improvements in demand conditions.
However, the rate of growth has slowed to a six-month low amid reports of supply constraints and new order growth stagnating due to the rising cost of living.
That said, new business expansion across Wales was among the strongest of the 12 monitored 海角视频 areas in, behind only London and the South East.
June data pointed to stronger expectations regarding the outlook over the coming year across the Welsh private sector. The level of optimism picked up from May amid reports of expansion plans, new product launches and client demand.
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This positive sentiment was mainly driven by firms within Wales’ manufacturing sector.
There was a solid expansion in employment for the fourteenth consecutive month in June, as Welsh private sector firms increased their staffing levels in response to rising demand.
The level of outstanding work across the Welsh private sector fell for a second consecutive month in June. The rate of reduction accelerated from May and was the fastest in 16 months.
Some firms linked the decline with the easing of supply chain disruptions. Notably, the fall in backlogged work was largely driven by the manufacturing sector.
Overall, the rate at which backlogs were cleared was among the strongest of the 12 monitored areas, beaten by the North East and Northern Ireland.
Average input costs faced by Welsh private sector firms continued to rise in June. Survey respondents attributed higher energy oil, and raw material costs to the rise in input.
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The rate of cost inflation remained sharp and among the highest across the survey’s history.
Moreover, the data indicated that the rate of inflation in the Welsh private sector was among the sharpest of the 12 monitored areas. Only Northern Ireland and the North East recorded steeper rates of cost inflation.
Welsh companies reported a further surge in prices charged across the private sector at the end of the second quarter. The rate of inflation slowed from May but was the second highest in survey history.
Anecdotal evidence linked price hikes to firms passing on part of the rise in cost burdens to their clients.
The uptick in output charges across Wales’ private sector was the third-fastest seen across the 12 monitored 海角视频 areas.
In line with the trend of input prices, only Northern Ireland and the North East recorded quicker rates of selling price inflation.
NatWest Wales board member Kevin Morgan said: “Welsh private sector firms saw growth in output and new orders decelerate in June. Anecdotal evidence suggested that the slowdown was linked to rising costs across the private sector economy.
“Inflationary pressures across the Welsh private sector, despite easing slightly in June, were among the fastest on record and among the sharpest seen across the 海角视频. As such, demand and output growth may continue to slow should firms continue to pass increasing cost burdens to their clients.”
He added: "On the positive side, June data indicated solid growth in employment levels and an optimistic outlook towards future output."