• Swindon & Wiltshire Economy
• Thursday June 11 2026

South West business activity flat in May

Business activity across the South West private sector was broadly unchanged in May amid muted demand conditions, according to the latest NatWest Growth Tracker.

At 49.9, the headline South West Business Activity Index – a seasonally adjusted index which measures changes in the region’s output of goods and services – fell fractionally from 50.1 in April, but held close to the neutral 50.0 level to signal little change in output levels across the region for the second successive month.

New orders fell for the third month in a row, albeit only slightly, as inflationary pressures remained elevated.

Notably, input costs continued to rise rapidly which, when combined with uncertainty over the economic outlook, led business confidence to slip to its lowest in over a year.

Faye Long, chair of the NatWest South West Regional Board, said: “Companies across the South West continued to feel the squeeze from sharply rising costs in May, which were linked in part to the Middle East conflict and uncertainty over the outlook.

“These factors are making clients more hesitant to commit to sales, dampening business activity across the region, which has broadly flatlined over the past two months.

“Nevertheless, it was encouraging to see that the downturn in sales eased again in May and was only marginal.

“Like the rest of the UK, the region faces a challenging situation of rapidly rising expenses and subdued customer demand, making it hard for firms to pass on these extra costs in full to clients and therefore placing a greater strain on their margins.

“It is therefore not surprising to see business confidence around future output dip in May to its lowest in 13 months, and that firms were less willing to take on additional staff.

“A recovery of output and demand will hinge on more stable business conditions, which will be heavily influenced by developments in the Middle East.”

Photo by Jonny Gios on Unsplash