September continued to see a blend of positive and unfavourable developments across the West Midlands private sector economy, according to new research.
In a beneficial context, input cost inflation softened to a three-year low which helped drag down the rate of increase in output charges to the slowest in 31 months, according to the NatWest PMI report.
Setbacks included no change in new business volumes, sustained job shedding and the first decline in output since January.
The headline Business Activity Index, a seasonally adjusted index that measures the month-on-month change in the combined output of the region's manufacturing and service sectors, slipped from 50.0 in August to 49.3 in September, but indicated only a marginal pace of contraction.
According to panellists, the fall largely reflected reduced customer orders. September data highlighted broadly stagnant levels of new business at West Midlands firms, with the respective seasonally adjusted index only fractionally above the neutral level of 50.0.
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Some firms linked growth to successful marketing efforts. Others saw demand worsen amid tight client budgets and hesitancy among them to commit to new projects.
Nevertheless, the local trend for sales was the second best regionally as declines were noted in ten areas. London was the top performer.
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As was the case in August, private sector jobs across the West Midlands decreased at the end of the third quarter. Where a fall was signalled, panellists mentioned subdued demand conditions, staff churn and high staff costs.
The overall rate of reduction in headcounts was, however, marginal and equal to that seen in the previous month. Payroll numbers fell in ten of the 12 monitored 海角视频 regions, the exceptions being Scotland and Northern Ireland.
Although private sector firms in the West Midlands continued to signal an increase in their expenses during September, the rate of inflation softened considerably to the weakest in three years.
Firms reported higher insurance, fuel, staff and transportation costs. Curbing the upturn was reduced pressure from energy, food and metals.
The West Midlands sat at the bottom of the regional rankings for input cost inflation. Similar to input costs, prices charged for West Midlands goods and services rose at a slower pace in September.
The increase was marked, albeit the weakest in over two-and-a-half years. Some firms hiked their fees amid efforts to protect margins but others reduced them due to competitive pressures and lower energy prices.
The local rate of charge inflation was below the 海角视频 average. Continuing the trend that began in December 2022, outstanding business volumes at companies operating in the West Midlands private sector decreased during September.
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Despite easing since August, the rate of contraction remained substantial and was the second-quickest since June 2020.
According to survey members, the clearing of pending workloads stemmed from supply-chain improvements, a lack of new business and staff working overtime.
West Midlands companies were strongly confident that output would increase over the course of the coming 12 months. Moreover, the overall level of positive sentiment was little-changed since August and among the highest since the start of 2022.
Optimism reflected the onboarding of new clients and expectations that underlying demand would strengthen. Planned investment in people and systems, as well as efficiency gains were also cited as factors supportive of upbeat forecasts.
The West Midlands saw the highest level of confidence out of the 12 monitored 海角视频 regions.
Rashel Chowdhury, from NatWest's Midlands and East regional board, said: "West Midlands companies suggested that their clients were unsure about the prospects for the national economy which, combined with tight budgets, led to increased caution about spending.
"With sales volumes barely moving in September, local firms trimmed output for the first time since the start of the year. But there is a silver lining.
"Prices didn't go up as much, which could help demand, while businesses are still feeling strongly positive about the year-ahead outlook for business activity.
"Compared to other parts of the 海角视频, the West Midlands led on the business sentiment front, saw one of the best trends for sales and the weakest uptick in input costs."