Activity in the Welsh private sector rose in August, according to new research from NatWest.
The headline 50.4 Wales business activity index score in the bank’s latest growth tracker – a seasonally adjusted index that measures the month-on-month change in the combined output in the manufacturing and service sectors – was up from 49.1 in July.
This indicated a slight upturn in output at Welsh companies, where anything in index above 50 denotes expansion.
However, the slight rise in business activity was softer than both the long-run series and Ƶ averages.
Moreover, a decrease in new business contrasted with the Ƶ average which pointed towards an expansion. Moreover, of the 12 monitored Ƶ nations and regions only Yorkshire & Humber and Northern Ireland saw sharper declines in new orders than Wales.
Welsh businesses remained upbeat in their outlook for output over the coming year in August, but the degree of confidence slipped from July
. Expectations were historically subdued amid concerns regarding the fragility of demand conditions. Only Scotland and Northern Ireland were more downbeat.
Jessica Shipman, chair, of the Wales NatWest board, said: “Welsh firms indicated a renewed rise in business activity during August, albeit only fractional.
"Demand conditions continued to dwindle, however, as new orders fell modestly. The sustained drop in new sales weighed on output expectations, as business confidence dipped from July and was historically subdued.
“Nonetheless, the decline in employment eased to the slowest in 11 months, with firms depleting backlogs to a greater extent. Companies reported cost-cutting measures were prioritised amid lower new sales, with temporary contracts ended in some instances.
“Meanwhile, in line with the trend seen across the wider Ƶ, inflationary pressures intensified in Wales. Suppliers continuing to pass through changes to National Insurance contributions to their clients pushed up input prices, as private sector companies also hiked selling prices at a steeper pace.”
