NatWest UK regional PMI report for August 2023

Most regional economies now in contraction territory

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Key findings

  • Just two out of 12 regions and nations record growth in activity in August 
  • Employment holding up in most places, but hiring easing
  • Rates of output price inflation generally slow

The latest NatWest Regional PMI® survey revealed a broadening decline in business activity across the UK in August, amid growing weakness in demand for goods and services. Whilst only a minority of regions saw employment fall, rates of job creation eased in most cases. Businesses' cost pressures generally remained high, linked in large part to rising wages, but the rate at which they increased prices charged for goods and services slowed in nearly all regions. 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. Of the 12 monitored regions and nations, only Wales (index at 50.5) and London (50.4) recorded growth in business activity in August. Even here, however, the rates of expansion were marginal. Output was unchanged in Scotland and the West Midlands, while all remaining areas recorded contractions. The steepest decline in activity was seen in Northern Ireland* (45.7), followed by the South West (46.7).


Sebastian Burnside, NatWest Chief Economist, commented:

"Economic malaise is beginning to set in across a growing number of UK regions, with the majority reporting a decrease in business activity in August amid a near-universal drop in demand. Only a couple of areas have managed to keep their heads above water and record marginal growth, namely Wales and London, while activity levels across the West Midlands and Scotland stagnated. "Employment has held up in most areas so far despite the downturns in business activity, with only the East Midlands, West Midlands, Wales and North East recording decreases in employment. That said, there are clear signs of a drop-off in hiring activity, with rates of job creation easing in most of the areas where employment is still rising. "Businesses' cost continue to rise at a steep rate by historical standards, and nowhere is this more evident than in London, where the economy is dominated by the service sector and thereby more likely to feel the effects of growing wages. "Still, it's encouraging from the point of view of households and monetary policymakers alike that rates of inflation in average prices charged for goods and services continued to ease across most parts of the UK in August."


Please see the regional reports in full:


UK National (PDF, 246KB)

North East (PDF, 372KB)

North West (PDF, 364KB)

Yorkshire and the Humber (PDF, 381KB)

East Midlands (PDF, 404KB)

West Midlands (PDF, 377KB)

East of England (PDF, 383KB)

London (PDF, 351KB)

South East (PDF, 391KB)

South West (PDF, 384KB)

Scotland (PDF, 362KB)

Wales (PDF, 380KB)

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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