Bank boss’s ‘worrying’ outlook

CONOMIC output has fallen in the East Midlands for the first time in 16 months according to a new NatWest business survey.

The monthly NatWest East Midlands Business Activity Index said orders were down last month and business confidence was at its lowest since the first lockdown as costs continue to rise. The region was one of three monitored by NatWest to post a decline in output, alongside the East of England and Northern Ireland.

The bank survey suggested new orders were dropping and that a “lack of confidence among customers and rapid price increases were reportedly behind the decline”. It also suggested that the drop in new work was happening in the service sector, with new manufacturing orders still stable. At the same time businesses continue to recruit – although there was a warning that might not last.

John Maude, who sits on the NatWest Midlands & East Regional Board, said: “The latest East Midlands PMI data paint a worrying picture of the region’s near-term economic outlook, with output joining new orders in contraction at the end of the second quarter.

“Business confidence is draining away, falling for the fifth month running to a level above only the spell seen during the initial wave of the Covid-19 pandemic. The potential for the cost of living crisis to cause an economic downturn was at the forefront of firms’ minds. One bright spot from the latest survey was a sharp and accelerated rise in employment as companies continue to play catch-up when it comes to workforce numbers following the pandemic. “It remains to be seen whether this positive labour market picture will continue should the declines in demand be sustained in the months ahead.”