Output from regional firms fell for the third consecutive month in August as a downturn in demand became more entrenched.
New findings from Natwest's North East PMI Business Activity Index, which measures the output of the region's manufacturing and service sectors, returned a score of 49.2, up from 46.8 in July but still showing the economy in decline. Researchers say firms were clearing backlogs of work faster but new business declined more sharply.
Despite positivity overall among regional firms surveyed, the North East saw a decline in confidence since July and recorded the worst 12-month outlook of all 海角视频 regions. However, sentiment remained above the rolling 12-month average as bosses saw past inflationary pressures to expect a recovery in demand.
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Data showed August was the fourth successive monthly decline in new work received by North East companies. And the rate of contraction accelerated from July to its strongest point since October last year.
That was set against a 海角视频-wide backdrop of declining demand, for a second month running and also at a faster rate. The North East saw the fourth-strongest drop in new orders among the 12 海角视频 regions monitored.
With a steeper drop in new orders, firms resorted to clearing backlogged work at a sharper rate as outstanding business fell at its fastest pace since August 2022 - well in excess of the 海角视频 average. Researchers said North East backlogs have fallen for 20 successive months in the longest sequence of all regions.
Meanwhile costs for businesses increased across August, continuing a 39-month sequence of inflation. The rate of increase was little-changed from the two-and-a-half-year lows seen in June and July. Firms said wages, fuel, interest rates and Brexit all contributed to pressures.
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In responses, prices of products and services raised last month as input costs were passed on to clients. While the rate of inflation was still historically strong, and above the 海角视频 trend, it eased to a 31-month low.
Malcolm Buchanan, chair of the NatWest North Regional Board, said: "You have to look beyond the headline figure to get a complete picture of business conditions in the North East private sector in August. Although total activity declined more slowly than in July, this was achieved by firms finishing existing business as the downturn in demand accelerated.
"Moreover, the outlook for the next 12 months was the weakest in the 海角视频, mirrored in the steepest drop in workforce numbers. In terms of prices, both indices remained well above their long-run averages in August but the latest dip in the Prices Charged Index is encouraging."