NE private sector confident

December saw the North East private sector slump deeper into contraction, according to new figures.

ThelatestPMI®surveydata from NatWest and IHS Markit showed business activity in the region fell at the fastest rate since July 2012 – led by a sustained downturn in new orders.

Firms meanwhile reduced employment and lowered output prices in an attempt to improve competitiveness.

More positively, however, businessconfidenceimproved to its highest for eight months.

The headline NatWest North East Business Activity Index – a seasonally adjusted index that measures changes in the combined output of the region’s manufacturing and service sectors – slipped deeper into contraction territory in December, registering a reading of 44.8 compared to 46.9 in November.

This was the second-lowest among the 12 regions monitored by the survey – ahead of Northern Ireland - and compared with a UK-wide average of 49.3.

Reports from surveyed businessespointedtoeconomic and political uncertainty weighing on demand.

Richard Topliss, Chairman NatWest North Regional Board, said: “The health of business conditions in the North East took a turn for the worse in December, with the PMI signalling the steepest drop in the region’s output of goods and services for sevenand-a-half years. It marked a difficult end to a tough year for the region’s companies.

“However, there are signs that the current weakness might not last for long. Firms’ expectations for output in a year’stimehaveimprovedconsiderably.”