BUSINESS NEWS
NatWest growth tracker reports strongest upturn in demand for over two years across South West
South West firms have welcomed the strongest upturn in new orders since early 2022 with renewed job creation and a marked expansion in output .
and pushed business sentiment to a near three-year high . While cost inflation receded in July , there was a faster increase in selling prices as companies aimed to catch up with significant increases in operating expenses in recent years . Overall , the latest results indicate promising prospects for the region in the near term , as firms seem to have the necessary resources to meet growing workloads .”
Moreover , business confidence improved to its highest level in nearly three years . Price trends were mixed as a softer rise in input costs compared with the fastest increase in selling prices for a year .
Rising from 53.9 in June to 54.7 in July , the headline South West 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 – showed a marked rate of expansion that was the quickest since May 2022 . Firms attributed growth to new business gains and demand resilience , as well as the release of pending projects and budget approvals at clients .
July ’ s rise in new orders was the fastest for 28 months . The sharp rate of expansion far outpaced the long-run series average . Local firms identified demand buoyancy , successful advertising and investment as the main determinants of sales growth .
Private sector companies in the South West indicated another monthly increase in their operating expenses during July . According to them , insurance premiums , labour , metal , paper and transportation costs have risen since June . The rate of inflation , although still sharp , eased to the weakest in six months .
Ongoing increases in input costs underpinned a further upturn in prices charged for South West goods and services . The rise was sharp and the most pronounced in a year .
Paul Edwards , Chair of the NatWest South West Regional Board , said , “ The South West emerged as the leader of an almost broadbased increase in new business across the 12 monitored UK regions and nations , saving a fall in the East Midlands . Demand strength boosted local output growth , underpinned a renewed rise in employment
Performance in relation to UK Out of the 12 monitored UK regions and nations , only Northern Ireland registered a stronger increase in output than that seen locally . With regards to new business , the South West topped the growth rankings . Survey participants expect demand conditions to remain positive in the year ahead , which combined with investment in marketing and hopes of greater market shares boosted business confidence . Companies also see the prospect of lower interest rates as an opportunity to the outlook . The overall level of sentiment climbed to a 35-month high and was the second-highest nationally .
For the first time in five months , privatesector employment in the South West increased at the start of the second half of 2024 . The pace of job creation was solid , the fastest in a year and above its long-run average . Anecdotal evidence showed that growth was supported by rising intakes of new business and capacity expansion plans . Outstanding business volumes declined in July , but the pace of depletion was moderate and broadly similar to that seen at the UK level . As was the case for input costs , no other UK region or nation saw a stronger rate of selling price inflation than the South West .
‘ No other UK region or nation saw a stronger rate of selling price inflation than the South West ’
THE BUSINESS EXCHANGE 2024 5