South West sees rise in business activity but employment levels fall – growth tracker
The latest NatWest Growth Tracker survey has indicated a stronger rise in business activity across the South West as sales continued to increase and confidence improved.
However, sharply rising costs and signs of excess capacity led to a further reduction in staffing levels. The South West Business Activity Index – which measures changes in the region’s output of goods and services – increased from 51.9 in October to 52.5 in November, to signal a solid rise in activity levels that was the quickest since August. Companies in the South West often mentioned that successful marketing efforts and firmer underlying demand conditions had lifted activity in November.
Private sector firms operating in the South West registered a back-to-back rise in overall new work during November. New business has now increased in three of the past four months. New client wins, successful marketing campaigns and the retention of established customers helped to lift new orders, according to panellists.
Faye Long, Chair of the NatWest South West Regional Board, said, “Companies across the South West had a strong performance in November, according to the latest Growth Tracker data. Business activity rose at the fastest pace in three months, while demand conditions continued to improve as firms reaped the benefits of successful marketing strategies and greater customer numbers. Optimism around the one-year outlook for output also brightened in November, with sentiment the highest seen in over a year amid forecasts of stronger market conditions and further increases in customer spending.
“However, firms maintained a cautious approach to staff numbers, which fell at a quicker pace in November. The reduction in headcounts occurred against a backdrop of sharply rising costs and signs of spare capacity, as firms were able to work through outstanding workloads and at an accelerated pace. It will be important to monitor both demand and cost trends as we move forward, to see if momentum continues to build and whether price pressures ease.”
South West bucks national trend
Whilst output expanded at a stronger pace in the South West, activity increased at a slower and only mild rate across the UK as a whole (index: 51.2). Notably, London was the only area in the UK to record a quicker increase in output than the South West.
Though modest and identical to that seen in October, the upturn in new orders contrasted with a fractional reduction in sales at the UK level.
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Pictured above: Faye Long, Chair of the NatWest South West Regional Board (Image: NatWest)
