10 August 2010
Output growth continued to slow in July, but remained
above UK average
Although latest data suggested a slowdown in both North West
private sector output and new business growth at the start of the
third quarter, the region continued to out-perform the wider UK
economy. Meanwhile, employment rose for the first time in three
months, albeit only fractionally.
North West private sector output increased markedly in July,
extending the current sequence of expansion to fifteen months.
However, the seasonally adjusted Business Activity Index – a
measure of the combined output of the region’s manufacturing and
service sectors – fell to 55.8, from 57.0 in June. Panellists
stated that higher activity levels resulted from further gains in
new work. The latest rise in output reflected growth in both the
manufacturing and service sectors.
Incoming new business to the North West private sector grew
strongly in July, albeit at the weakest rate since last November.
Anecdotal evidence indicated that greater demand for the region’s
goods and services mostly reflected an improved economic
environment. By sector, service providers posted a faster increase
in new work than manufacturers.
Job creation was recorded in the North West private sector for
the first time since April. However, the rate of expansion was only
marginal and weaker than the average for the year-to-date. Reports
suggested that staffing was increased to accommodate greater
business requirements. Data showed that employment growth was
concentrated in the manufacturing industry, as service firms
continued to reduce staffing.
Companies in the North West private sector cleared backlogs at
an accelerated rate in July, aided by slight growth of employment.
Outstanding business fell at a solid pace that was the most
pronounced for eight months. Firms commented on expanded capacity
and efforts to catch up on unfinished work.
Both input and output price inflation slowed during July.
However, each measure remained comfortably above its respective
long-term trend. According to panellists, higher fuel, wage and raw
material costs were the principal sources of upward pressure on
input prices. Companies in the manufacturing sector made particular
reference to increased prices for steel, paper products and
polystyrene.
Steven Broomhead, Chief Executive of the NWDA, said:
“It’s very pleasing to see the Northwest continuing to outperform
the UK economy in terms of new business growth, particularly as
previous data suggested this would slow. However, while this is
encouraging, it is important to recognise that there is no quick
fix to economic recovery which is why we must continue to work
together in creating the best possible conditions for economic
growth.”
-End-
For further information, please contact:
Northwest Regional Development Agency
Neil Roscoe
Public Relations Manager
NWDA
Tel: 01925-400-232
Email: neil.roscoe@nwda.co.uk
Markit
Gemma Wallace, Economist Caroline Lumley,
Corporate Communications
Telephone +44-1491-461-075 Telephone
+44-20-7260-2047
Email gemma.wallace@markit.com Email
caroline.lumley@markit.com