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Economics

NatWest UK regional PMI report for March 2023

Business activity rises across almost all areas in March

Key findings

  • London tops growth rankings, while East of England lags behind
  • Divergent trends in regional employment
  • Price pressures, although still high, continue to ease

 

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.

Nearly all areas of the UK recorded a rise in business activity in March, the only exception being the East of England where output was unchanged (index at 50.0). Growth did however ease in the majority of cases, including the top-ranked region, London (55.1). The most notable upswing in momentum was in Northern Ireland* (54.9), where business activity rose at the quickest rate for a year.

* PMI survey coverage in Northern Ireland includes construction and retail, as well as manufacturing and services.

 

Sebastian Burnside, NatWest Chief Economist, commented:

“March’s PMI data rounded off an encouraging first quarter, with trends in activity and new business having improved compared to the second half of last year across all regions and nations.   

“London remains ahead of the pack when it comes to growth, recording the strongest increases in both business activity and inflows of new work in March. 

“Price pressures remain elevated across the UK. However, we’ve seen firms’ input costs rise at a slower rate in all areas in March, in the latest sign that headline inflation is likely to start coming down in the months ahead.   

“Signs of life in demand, together with easing energy and inflation concerns, has contributed to a marked improvement in business confidence in all regions from the lows seen last autumn.

“It’s more of a mixed bag on the jobs front, however. The stability in employment seen at the UK level in March masked divergent regional trends, with workforce numbers falling in just under half of the areas monitored, and markedly in some cases. With only Northern Ireland and London recording increases in backlogs of work during the latest month, the data hint at capacity pressures having eased in most areas of the UK.”

 

Please see the regional reports in full:

UK National (PDF, 245kB)
North East (PDF, 372kB)
North West (PDF, 363kB)
Yorkshire and the Humber (PDF, 387kB)
East Midlands (PDF, 403kB)
West Midlands (PDF, 379kB)
East of England (PDF, 384kB)
London (PDF, 351kB)
South East (PDF, 389kB)
South West (PDF, 384kB)
Scotland (PDF, 364kB)
Wales (PDF, 379kB)

This material is published by NatWest Group plc (“NatWest Group”), for information purposes only and should not be regarded as providing any specific advice. Recipients should make their own independent evaluation of this information and no action should be taken, solely relying on it. This material should not be reproduced or disclosed without our consent. It is not intended for distribution in any jurisdiction in which this would be prohibited. Whilst this information is believed to be reliable, it has not been independently verified by NatWest Group and NatWest Group makes no representation or warranty (express or implied) of any kind, as regards the accuracy or completeness of this information, nor does it accept any responsibility or liability for any loss or damage arising in any way from any use made of or reliance placed on, this information. Unless otherwise stated, any views, forecasts, or estimates are solely those of NatWest Group, as of this date and are subject to change without notice. Copyright © NatWest Group. All rights reserved.

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