- Output rises in all areas, led by particularly sharp growth in the capitaDivergent trends in regional employment
- Employment up everywhere – except in Wales
- Quicker increases in output prices point to sticky inflation
The latest Regional PMI® survey from NatWest indicated broad-based growth in business activity across the UK in April, led by a sharp expansion in output across London. Employment levels generally increased, supported by positivity towards the outlook. Price pressures meanwhile remained elevated, with average charges for goods and services rising at a quicker rate in almost all areas.
The PMI Business Activity Index is the first fact-based indicator of regional economic health published each month, tracking the monthly change in the output of goods and services across the private sector. A reading above 50 signals growth, and the further above the 50 level the faster the expansion signalled.
All 12 UK nations and regions monitored by the survey saw a rise in business activity in April, the first time this has been the case since February last year. The strongest growth by far was recorded in London, where it hit a ten-month high (index at 59.0). Wales (51.1) sank to the bottom of the rankings for output growth and was one of only two areas, alongside Northern Ireland* (53.1), where the pace of expansion slowed.
* PMI survey coverage in Northern Ireland includes construction and retail, as well as manufacturing and services
Sebastian Burnside, NatWest Chief Economist, commented:
"It was a generally positive start to the second quarter for all regions and nations across the UK, with business activity and inflows of new work rising across the board. But the clear standout performer in terms of output growth is London, which has regained considerable momentum in recent months following a slowdown in the second half of last year.
"It was also encouraging to see a general pick-up in hiring activity in April following a slower period for the jobs market in recent months, which has been helped by a recovery in business confidence. Expectations have strengthened considerably in all regions since the end of last year, and even improved further in April in just over half of cases.
"At the same time, the latest PMI data point to some stickiness in inflation. Despite signs that cost pressures faced by businesses continue to ebb from the highs over the past two years, average prices charged for goods and services actually increased more quickly in almost all areas in April, perhaps supported by stronger-than-expected demand conditions."
Please see the regional reports in full:
Yorkshire and the Humber
East of England