North West's economic recovery derailed by November lockdown

The November lockdown derailed the North West’s economic recovery, latest regional PMI data from NatWest shows

Tuesday, 15th December 2020, 12:27 pm
Updated Tuesday, 15th December 2020, 2:16 pm
Heather Waters of NatWest

Business activity dropped to a five-month low.

And jobs were lost at an alarming rate.

The headline North 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 – dipped to a five-month low of 50.7 in November, from 52.0 in October.

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Notably, however, the reading was still slightly above the 50.0 no-change mark that separates expansion from contraction, and higher than the equivalent UK-wide figure of 49.0.

Detailed data indicated that output growth was driven by the manufacturing sector.

There was a degree of resilience shown in demand for goods and services across the North West private sector in November, despite the new lockdown measures during the month.

Firms’ expectations for future output perked up in November, partially reversing the declines in confidence seen in the previous two months.

But after having eased in October to the slowest for seven months, the rate of job losses across the North West private sector re-accelerated in November.

It showed the steepest drop in employment since August. Higher costs led firms in the North West to raise the prices they charged for goods and services for the sixth month in a row in November.

Heather Waters, of NatWest North Regional Board, commented: “The recovery in the North West’s private sector that’s been in evidence since the summer was dealt a blow by the introduction of a second national lockdown in November, as indicated by the PMI dropping to a five-month low.

"Encouragingly, however, regional business activity continued to show resilience.”