• Swindon & Wiltshire Economy
• Wednesday October 9 2024
• Author Name: Peter Davison

New business in ‘confident’ South West rises at fastest rate since March 2022 – NatWest

Private sector firms in the South West have welcomed a sharp upturn in new business intakes with a further expansion in output, according to the latest Regional Growth Tracker from NatWest.

And South West business owners are among the most upbeat in the UK, with only bosses in the South East and London feeling more confident.

Despite a quicker increase in sales, however, there were softer expansions in business activity and employment.

And on the price front, input costs rose at the second-slowest pace since January 2021, resulting in the weakest rate of charge inflation in over three-and-a-half years.

Falling from 55.1 in August to 53.7 in September, the headline South West Growth Tracker 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 – indicated the softest rate to expansion since May.

Expectations that demand conditions would remain positive in the year ahead underpinned upbeat forecasts for output.

The overall level of positive sentiment was one of the highest seen since the start of 2022.

Advertising, capacity expansion and investment in innovation all fuelled optimism.

Local companies were among the most upbeat across the UK, with only the South East and London signalling stronger confidence.

There was a softer increase in prices charged for the provision of South West goods and services, the weakest in over three-and-a-half years. The rate of inflation was above the long-run series trend, but broadly aligned with the UK average.

Paul Edwards, chair of the NatWest South West Regional Board, said: “The South West reclaimed its top position in the regional sales growth rankings, amid the steepest rise for two-and-a-half years.

“While this substantial upturn, coupled with improved business confidence, is promising, the latest results showed softer expansions in output and jobs.

“Local firms remained engaged in restructuring efforts and redundancies, with some even suggesting that severance packages added to their cost burdens.

“There were encouraging trends for prices in September, as charge inflation receded to its slowest in over three-and-a-half years alongside one of the weakest increases in input costs since the start of 2021.

“If these trends continue, price stability could lead to a more favourable interest rate environment, supporting sales and local economic growth.”

Latest: South West businesses see sales rise in October – Natwest