- All 12 monitored UK regions and nations record lower business activity
- Rates of job creation generally slow amid darkening business outlook
- Firms in majority of regions see slower, albeit still sharp, rises in costs
Soaring inflation and heightened levels of uncertainty served to dampen demand, despite the survey indicating some easing of price pressures. With businesses generally becoming less optimistic about growth prospects, rates of job creation slowed in most 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.
October saw a fall in business activity across all 12 monitored regions, the first time this has been the case since the third national lockdown in January 2021. The South West posted the steepest decline (index at 42.3), followed by Northern Ireland* (44.4) and the North East (45.7) respectively. London's decline in activity was only marginal (49.7), but nonetheless its first for over a year-and-a-half.
* PMI survey coverage in Northern Ireland includes construction and retail, as well as manufacturing and services.
Sebastian Burnside, NatWest Chief Economist, commented:
"The UK's economic downturn reached an unwelcome milestone in October, with latest NatWest PMI data showing a reduction in business activity across all 12 regions and nations monitored by the survey – the first time this has been the case since January 2021.
"What's more, when it comes to prospects for the coming year, business confidence is at historically low levels across the board, which bodes ill for future investment and job creation, among other things.
“Regional labour markets continued to show resilience during October. That said, there were yet more signs that conditions have begun to cool, with falling levels of activity and a gloomy economic outlook causing firms take a more cautious approach to hiring. Of the 11 regions that recorded a rise in employment in October, eight saw a slower rate of job creation, while there was a further decrease in employment in the North East.
"Sharply rising costs remain a key challenge for businesses throughout the UK. Firms' input prices – and indeed their output prices – rose at a slower rate in most regions in October, but inflationary pressures remain stubbornly high and point to the prospect of further interest rate hikes and, thereby, a further squeeze on demand."
Please see the regional reports in full:
UK National (PDF, 250KB)
North East (PDF, 376KB)
North West (PDF, 365KB)
Yorkshire and the Humber (PDF, 382KB)
East Midlands (PDF, 402KB)
West Midlands (PDF, 379KB)
East of England (PDF, 385KB)
London (PDF, 354KB)
South East (PDF, 400KB)
South West (PDF, 387KB)
Scotland (PDF, 369KB)
Wales (PDF, 376KB)