Business activity in the North East stabilised in February but remains the weakest in the UK, according to an influential survey.
The NatWest North East PMI Business Activity Index – which measures change in the region’s manufacturing and service sectors – rose to 50.0 in February, from 47.1 in January, indicating a stabilisation in private sector output in the North East. The reading ended a seven-month run of decline, but the North East was the only UK region to not record growth of activity in February.
Survey data showed that the volume of new orders received by North East firms rose for the second month running in February, and at a faster rate than the long-run average (since 2001). But companies in the region continued to reduce workforces, with private sector employment falling for the ninth month running, according to the NatWest data. The North East was one of only two areas - alongside Wales - to see job numbers fall.
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Cost burdens facing private sector firms in the North East remained high overall in February, but inflationary pressure moderated, NatWest said, and private sector firms in the North East increased their charges further.
Malcolm Buchanan, chair of the NatWest North regional board, said: “Although the North East saw an end to the recent downturn in output in February, the region remained a laggard compared with other parts of the UK, with all 11 other regions registering higher levels of activity.
“The North East was also a weak spot in terms of private sector jobs, one of only two regions – the other being Wales – to post a decline in February. More encouragingly, new business rose at a faster rate – one that was on a par with the UK as a whole – and price pressures eased.”
The snapshot of the region’s economy comes after official figures released at the end of last week showed the UK’s economy returning to growth in January.The Office for National Statistics (ONS) said the economy grew by 0.3% in January, following a sharp 0.5% decline in gross domestic product (GDP) in December.
This week will see more signs on how the economy is faring with the release of figures tomorrow [TUES] on national and regional unemployment levels, followed by the latest inflation statistics, which will be published on the same day as Chancellor Jeremy Hunt’s Budget.
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