Companies across the North East are posting a strong rise in business activity halfway through the year, according to new data.
The latest regional PMI survey from NatWest, through its Business Activity Index, points to both output and new orders increasing, albeit at a slower rate.
The seasonally adjusted index – which measures the month-on-month change in the combined output of the region’s manufacturing and service sectors – fell from 63.6 in May to 60.0 in June, indicating a softer but still robust increase in private sector output.
The index was below the corresponding reading for the 海角视频, however, and the fourth-lowest of the 12 monitored regions.
Latest data has shown a further rise in new business received by firms in the North East private sector, extending the current pattern of expansion to four months.
Panel members said demand had increased across the private sector, following the lifting of Covid-19 restrictions allowing most businesses to reopen.
Businesses were optimistic regarding the year-ahead outlook for activity in June, although the level of positive sentiment softened from the five-year high recorded in May.
However, some concerns were raised surrounding the lack of freight capacity.
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The overall degree of business confidence in the North East was the joint-second lowest of all monitored regions, ahead only of Northern Ireland and matching Scotland.
Employment levels among North East private sector firms rose further at the end of the second quarter.
Anecdotal evidence pointed to higher operating requirements as demand increased following the lifting of restrictions. The rate of job creation was modest overall and the softest recorded across the 12 monitored 海角视频 regions.
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As new orders continued to rise, North East firms saw outstanding business volumes increase for the second successive month in June.
The rate of backlog accumulation also accelerated from May, to reach the fastest since March 2011 and was solid overall – although the pace of growth was the joint-slowest of the 12 海角视频 regions monitored, matching that recorded in Scotland.
The data also highlighted how firms faced a rapid rise in average input prices, while the rate of inflation also rose the fastest since the series began in January 2001. Those who took part in the survey attributed this to rising raw material and freight costs amid shortages.
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Average prices charged for goods and services in the North East also rose for the tenth month in a row in the latest survey period.
Richard Topliss, chairman of NatWest North Regional Board, said: “North East private sector activity showed sustained growth halfway through the year, with output rising for the fourth month in succession.
"While softer than May’s nine-month high, the rate of growth remained strong overall as businesses were able to operate under looser restrictions for the full month of June.
“Firms also recorded a marked, albeit softer, rise in aggregate new business. However, sustained increases in new orders and a lack of available staff exerted extra pressure on capacity and led to the sharpest rise in outstanding business since March 2011.
"At the same time, North East private sector firms faced another record rise in input prices in the latest survey period amid strong rises in raw material and transport costs due to widespread shortages. This contributed to a new record rise in prices charged for goods and services.”