Relaxation of Covid-19 restrictions has led to a increased output and fuller order books for firms in the South East.
Staffing levels are on the up but prices are rising toto a near record high, according to the latest data for Natwest PMI report.
The seasonally adjusted index that measures the month-on-month change in the combined output of the region’s manufacturing and service sectors – rose from 52.9 in December to 54.0 in January, signalling an eleventh consecutive monthly improvement in business conditions.
READ MORE: {}
Stuart Johnstone, Managing Director, London & South East, Corporate & Commercial Banking, said:
“January data revealed a positive start to 2022 for the South East amid a quicker expansion in private sector activity. Growth stemmed from greater client demand following the relaxation of virus-related restrictions and increased consumer confidence. At the same time, firms were optimistic following plans to broaden product offerings and hopes to secure greater investment. Meanwhile, headcounts continued to rise sharply as firms sought to grow their output levels in anticipation of higher customer numbers over the course of the year.
"There were, however, worries surrounding shortages and price pressures, which has been a common theme over the last year or so. In fact, input price inflation quickened to a near-record high amid surging fuel, energy, transportation, raw material and wage costs. Concerningly, sharp inflationary pressures look set to continue over the course of the year with energy costs rising rapidly."
ln line with facing higher expenses, private sector companies in the South East raised their selling charges at the start of the year. Firms mentioned that higher prices (particularly for raw materials, energy and transportation) were passed on to clients during the month.
How NatWest is supporting BusinessLive
NatWest is the national partner of BusinessLive.
The banking group is teaming up with BusinessLive on a series of events throughout the year aimed at entrepreneurs and business leaders.
Alongside a wide range of banking services, NatWest offers businesses specialist sector knowledge in areas such as manufacturing and technology, as well as access to specialist entrepreneurial support.
Most Read
Meanwhile, new business received by private sector firms in the South East rose at a sharp and accelerated pace in January, thereby stretching the current sequence of growth to 11 months. According to panel members, new order growth was underpinned by the relaxation of some virus-related restrictions and higher customer numbers.
New orders in the South East rose at that the same pace as seen across the 海角视频 as a whole.
Firms in the South East maintained an optimistic view towards output levels in the year ahead. Panellists mentioned hopes for a return to normality, greater investment, plans to broaden product offerings and improvements in product availability. Despite moderating from December, sentiment was amongst the strongest in the series.
Firms in the region were more optimistic than those across the 海角视频 as a whole.
The upturn in private sector employment in the South East extended into January, with headcounts rising in each month since March 2021. Moreover, the rate of expansion was sharp, accelerated from that in December and was quicker than the long-run series average. Increased investment and efforts to build headcounts in anticipation of greater demand led to the rise, according to panellists.
Manufacturers registered a much stronger uplift in staffing levels than service providers.
Latest data revealed an eleventh successive increase in outstanding business at private sector firms in the South East. The rate of growth was broadly in line with that in December, and the second-softest in the current sequence of growth. Firms continued to cite supply-chain issues and raw material shortages.
Don’t miss
That said, backlogs rose at a softer pace in the region compared to the 海角视频 average.
If you want more stories like this...
You can sign up to our e-bulletins of business news direct from our regional editors or our weekly round-up of the best articles in key sectors. Sign up here