Company outputs and new business activity across the East Midlands saw the sharpest decline last month since the height of the first lockdown, according to a headline NatWest report.
The renewed restrictions added pressure to the region’s already struggling businesses, with the service sector worst hit as non-essential companies closed.
The NatWest East Midlands Business Activity Index – a seasonally adjusted survey that monitors the monthly change in productivity and services in the private sector – went into reverse in January as the new lockdown kicked in.
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It was the steepest decline in business activity across the East Midlands since May 2020.
Businesses said they had seen a renewed decline in new orders, although the rate of contraction was slower than the 海角视频 average.
Despite that, East Midlands companies continued to register upbeat expectations regarding the coming year – though the degree of confidence was below the 海角视频 trend and fell to a five-month low.
Optimism was often attributed to hopes of an end to the Covid-19 pandemic, although Brexit and fears as to the longevity of restrictions dampened positive sentiment.
There was also a drop in the number of people in work in the East Midlands. Although broadly in line with the 海角视频 average it was the fastest that the region has seen workforce numbers drop for three months.
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Many companies said lower employment was linked to a reduction in output and Covid-19 restrictions.
January data signalled broadly unchanged levels of outstanding business across the East Midlands private sector, bringing to an end two months of expansion.
The regional trend contrasted with that of the 海角视频 as a whole, which registered a solid contraction in backlogs of work.
The rate of cost inflation in East Midlands firms softened slightly from December’s recent high, but the pace of increase was the second fastest since September 2019, following reports of steep rises in raw material and transportation costs.
Although easing from that seen in the previous survey period, the rate of inflation continued to outpace that seen across the 海角视频 as a whole.
Private sector firms in the East Midlands also signalled an accelerated rise in selling prices during January.
John Maude, from the NatWest Midlands & East regional board, said: “Reimposed lockdown restrictions impacted business across the East Midlands significantly, as output and new orders fell sharply in January.
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“Although not as marked as that seen across the 海角视频 as a whole, the decline was the steepest since May 2020 when the initial lockdown period stymied business operations.
“Unchanged pressure on capacity and reduced business activity led to a faster fall in employment, reflecting weaker short-term outlook expectations.
At the same time, firms were less upbeat regarding confidence that activity would increase over the next year, as concerns about the ongoing pandemic and lockdown remained at the forefront of minds.
“Cost pressures eased slightly, but input prices continued to rise at a marked pace.
“Despite weak demand conditions, companies were able to partially pass on higher costs through the fastest increase in output charges since February 2020.”