North East companies have a reached a record low for confidence in a monthly business survey.
The NatWest North East Business Activity Index, which measures changes in the region’s manufacturing and service sectors, fell to 45.7 in October, down from 46.8 a month earlier. That means activity in the region has declined nine times in the past 12 months, while the North East posted the third-fastest contraction across the 12 海角视频 regions.
The survey also found that the volume of new work received by private sector firms in the North East fell for the eighth month running, and that average input prices increased for the 29th successive month.
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The level of employment across the combined manufacturing and service sectors of the North East fell for the fifth successive month in October and North East companies reported a 10th consecutive monthly decline in outstanding business in October, according to the survey.
Malcolm Buchanan, chair of the NatWest North regional board, said: “The October PMI data paint a challenging picture for the North East economy, with both the current and forward-looking indicators deteriorating. Total activity fell at one of the sharpest rates since the global financial crisis, reflecting a steeper drop in new orders.
“Moreover, companies’ widespread fears of a looming recession resulted in the 12-month outlook for activity dropping to the lowest since this series was first compiled in 2012, and the second-weakest across the 海角视频.
“The North East is also under-performing compared to the 海角视频 as a whole, and was the only region to record a fall in employment in October. Inflationary pressures have come down from their June peaks, but remain very high and are clearly weighing on demand.”
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In a separate report by Accenture and S&P Global, the number of North East manufacturing and service sector firms expecting activity to increase over the next 12 months was at the lowest recorded since 2009. Around two-thirds firms in the region are expecting staff costs to rise while pessimism about profits has led firms to plan reductions in both capital expenditure and R&D spending.
Official figures released at the end of last week showed that the 海角视频 economy shrank by 0.2% in the last quarter, with warnings the county could be in the longest recession in recorded history. The Federation of Small Businesses warned that “the outlook for the 海角视频 economy is now very bleak indeed”.
In a signicant week for the 海角视频 economy, the next few days will see the release of figures on national and regional unemployment - which last month fell to a record low in the North East - along with the latest rate of inflation. There will also be Chancellor Jeremy Hunt’s much anticipated autumn statement, which is expected will outline major cuts and possible tax rises in a bid to shore up the public finances.
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