Growth revives across North West private sector in August

The North West saw an acceleration in business activity growth in August, the latest NatWest Growth Tracker report showed. The total output of goods producers and service providers in the region rose at the fastest rate since April, with the headline North West Business Activity Index coming in at 54.0 in August, up from 51.5 in July. Driving the upturn was stronger customer demand and an associated pick-up in inflows of new business, which rose for the eighth month in a row in August. Furthermore, the rate of increase in new work remained robust and among the quickest seen over the past two years. August data indicated another rise in the level of employment across the North West private sector, thereby extending the current sequence of workforce growth to four months. The pace of job creation remained solid and was little-changed from that recorded in July. Businesses' operating expenses rose more slowly in August. The rate of cost inflation in fact fell noticeably from the month before and was the weakest seen since October last year. It was also back below its historical series average. Malcolm Buchanan, Chair of the NatWest North Regional Board, said: "August saw a welcome revival in business activity growth across the North West private sector, reversing the loss of momentum seen in previous months. The data signalled a healthy pipeline of incoming new work, which not only bodes well for growth being sustained as we move into the latter stages of the year, but is also supporting the creation of jobs across the local economy. Employment has now risen fairly solidly for four successive months, with firms looking to the future with relatively high optimism. As for prices, there was some relief for businesses as costs rose at the weakest for ten months in August.” Performance in relation to UK The pace of expansion of business activity in the North West outstripped the UK average (52.8). Underlying data indicated that growth was seen across both manufacturing and services, with the former recording the stronger rate of expansion. Of the other 11 monitored nations and regions, only London and the South West saw stronger rates of growth in new work than the North West, while the uptick in Northern Ireland matched that seen locally. Firms in the North West remained optimistic towards their growth prospects in the coming year in August. Although expectations slipped back from July's near three-year high to the lowest since April, they were above the UK-wide average and stronger than the historical series trend. Local businesses reported hopes of a general upturn in market conditions, alongside plans for entry into new markets. The rate of job creation in the North West was broadly line with the average seen across the UK as a whole. The hiring of additional staff was primarily driven by order book requirements, according to anecdotal evidence. Extra staffing capacity helped firms in the North West reduce their backlogged orders during August. The result continued a sequence of continuous decline in outstanding business stretching back to mid-2022. The rate of depletion was slightly quicker than that seen across the UK as a whole. Local firms were less aggressive in their own price-setting compared with the month before. Nevertheless, despite ticking down from July's 13-month high, the rate of increase in average prices charged for goods and services was above long-run average and the second-highest nationally, behind that recorded in the South West.