There was a combination of sustained economic growth across the West Midlands and further slowdowns in inflation rates, according to newly published data.
The PMI report, which is published by NatWest and is a measure of monthly changes in the combined output of the region's manufacturing and service sectors, signalled growth for the fifth month in a row.
However, falling from 54.2 in May, the latest reading showed the slowest rate of expansion over this period.
According to panellists, the upturn in business activity stemmed from better-than-usual weather, the onboarding of new clients and demand resilience. The slowdown reflected signs of economic deceleration.
The West Midlands came fourth in the regional rankings for output at the end of the second quarter. West Midlands firms signalled higher inflows of new orders for the fifth month in a row in June.
Although the slowest over this period, the rate of expansion was solid and equal to its long-run average. Panellists attributed the uptick in sales to new customer onboarding and demand resilience.
The slowdown reportedly stemmed from de-stocking initiatives at some clients. The West Midlands came third in the regional rankings for new business growth, behind London and Scotland.
There was a noticeable slowdown in input cost inflation across the West Midlands during June. The latest increase was sharp overall but the least pronounced in over two-and-a-half years.
Hikes to cost burdens were associated with greater workforce and utility bill outlays. Inflation was reportedly curbed by successful price negotiations with vendors, fierce competition among suppliers and a general improvement in raw material availability.
In line with a softer increase in input costs, prices charged for goods and services in the West Midlands rose at a weaker rate in June.
The pace of inflation remained historically high but receded to a 28-month low. Some companies reportedly hiked their fees due to greater personnel expenses and previously absorbed cost increases.
Others passed on to their clients savings made from lower input prices. The local rate of charge inflation was below the national average.
Private sector employment in the West Midlands rose for the 28th successive month in June but the pace of growth was the slowest over this period and only fractional.
Some firms linked job creation to expansions in departments such as marketing as well as efforts to fulfil greater demand needs.
Others attributed lower payroll numbers to automation, the non-replacement of voluntary leavers, redundancies and recruitment freezes.
The local trend for employment was the second-weakest regionally, ahead only of Wales where stabilisation was signalled. The latest results signalled an increased degree of spare capacity among West Midlands companies.
Unfinished business volumes decreased for the seventh straight month and at the quickest pace in three years.
According to survey participants, the reduction was supported by a slowdown in new order growth, staff working overtime and the easing of supply-chain pressures.
June data indicated that West Midlands firms remained confident output would increase over the course of the coming 12 months.
Predictions that demand conditions will remain favourable, hopes that geopolitical issues will diminish and the launch of new products and services supported optimism.
Despite slipping to a six-month low, the overall level of positive sentiment remained above its long-run average.
Out of the 12 monitored UK regions and nations, only firms in the South East were more upbeat than those in the West Midlands.
Rashel Chowdhury, a member of NatWest's Midlands and East regional board, said: "Demand conditions in the West Midlands remained resilient in June, therefore underpinning further expansions in new business and output.
"Although solid, it is worth noting that rates of growth cooled, with firms noting pockets of de-stocking efforts among some of their clients and concerns of an economic slowdown.
"Additionally, there were more instances of hiring freezes and redundancies locally, meaning that employment neared stagnation.
"There was positive news with regards to inflation, with the softest increases in both input costs and output charges since late-2020 and early 2021 respectively favouring near-term sales prospects."
