Muted demand for West Midlands goods and services negatively impacted economic growth in the region, according to new research.
Output still rose in March but did so to the least extent in three months and at a below-trend pace, while hiring freezes, redundancies and downsizing caused the fastest decline in employment for over three years.
Inflation rates also receded during the month, according to the latest NatWest PMI report which measures the month-on-month change in the combined output of the region's manufacturing and service sectors.
It said this was at 52.8 in March, down from 53.1 in February but highlighting expansion for the sixth month running.
The rise was moderate, the slowest in the year-to-date and below the long-run series average. Growth was reportedly curbed by fading demand.
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Private sector firms in the West Midlands signalled only a fractional rise in new business intakes during March. The respective seasonally adjusted index moved closer to the 50.0 no-change mark and was at its lowest for six months.
Some firms indicated that prospects came to fruition while others observed weaker demand conditions. The overall expenses of West Midlands companies continued to rise sharply in March.
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Despite receding since February, the respective seasonally adjusted index remained well above the 50.0 threshold and the long-run series trend.
Surveyed members reported greater commodity, fuel, labour, semiconductor and wood costs. In some instances, hikes were attributed to input shortages at vendors and disruptions in the Red Sea, according to NatWest.
Reflecting ongoing increases in operating expenses, West Midlands firms again lifted their selling prices at the end of the first quarter.
The overall rate of inflation was marked and remained historically elevated, despite slipping to a three-month low. The local rate of charge inflation was broadly aligned with the 海角视频 average.
March data showed back-to-back declines in private sector employment across the West Midlands. Moreover, the pace of contraction was solid and the fastest in over three years.
Anecdotal evidence highlighted downsizing, hiring freezes and redundancies amid faltering demand. Regionally, the West Midlands recorded the worst trend for payroll numbers and Northern Ireland the best.
Despite lower headcounts, West Midlands companies continued to clear their backlogs during March amid muted demand conditions.
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Little-changed from February, the pace of depletion was solid but softer than the long-run series average. Some panellists suggested that efficiency gains supported the latest drop.
Companies operating in the West Midlands became more optimistic towards the year-ahead outlook for output. The overall level of positive sentiment climbed to a 26-month high.
New client onboarding and expansion plans, alongside advertising and investment, were among the reasons cited for upbeat forecasts.
Out of the 12 monitored regions and nations, the West Midlands topped the rankings for business confidence.
Rashel Chowdhury, from NatWest's Midlands and East regional board, said: "West Midlands output expanded during March, more so due to the clearing of backlogs rather than any improvement in new business intakes.
"Demand was generally muted, with businesses often struggling to secure new work. Firms largely maintained their focus on trimming expenses which happened via cuts to employee numbers.
"Several panellists cited downsizing, hiring freezes and redundancies at their units. The plus side to faltering demand was a reduction in price pressures locally, though input costs and selling prices still rose substantially since February."