West sees a record increase for jobs

AN increase in tourism and the easing of Covid restrictions have boosted the South West economy and created jobs, a new report reveals.

But shortages of materials, a dearth of workers, higher transport fees and rising fuel bills all led to a further rapid increase in costs for companies.

The latest NatWest South West PMI shows the region’s private sector firms saw a notably softer, but still solid, increase in business activity midway through the third quarter.

Recovery momentum slowed following the record boosts to output and sales after the initial loosening of Covid-19 restrictions.

But, nonetheless, business confidence hit a six-month high, which in turn supported a record increase in employment.

At 54.7 in August, the headline NatWest South West Business Activity Index – a seasonally adjusted index that measures the month-on-month change in the combined output of the region’s manufacturing and service sectors – fell from 62.2 in July to signal a sustained upturn in output.

Though solid, the rate of expansion eased notably from the previous month, however, and was the softest seen since March.

The rate of growth was broadly in line with that seen across the UK as a whole, however, which also saw a marked slowdown in momentum.

Firms operating in the South West recorded a sharp increase in inflows of new work in August, with businesses often attributing the upturn to the further release of pent-up demand since the loosening of Covid-19 restrictions and increased tourism in the region.

That said, the rate of new order growth softened to a five-month low, and was much slower than May’s multi-year peak.

New business also expanded at a softer rate across the UK as a whole, though growth was stronger than that seen in the South West.

The South West also recorded the second-fastest expansion of payroll numbers of all 12 UK regions, after London.

Paul Edwards, chair of the NatWest South West Regional Board, said: “The South West economy continued to post strong growth in August, despite overall output expanding at the softest rate in five months as initial boosts to activity from Covid-19 measures easing faded.

“Nonetheless, companies were the most optimistic since February regarding the 12-month business outlook, and this in turn helped to drive the steepest increase in employment in nearly 25 years of data collection.”