Wales’ private sector firms record further rise in activity and jobs

PRIVATE sector firms in Wales recorded a further rise in business activity at the start of the third quarter, according to the last purchasing managers’ index from NatWest.

Moreover, the rate of growth picked up from June. The acceleration was driven by a sharper rise in new business and a return to growth in employment, with the former contributing to an improvement in business confidence. Inflationary pressures eased, but remained elevated nonetheless.

The headline Wales Business Activity Index – a seasonally adjusted index that measures the combined output of the manufacturing and service sectors – posted 55.6 in July, up from 52.0 in June. This figure signalled the most marked expansion in output in five months, and one that was sharper than the long-run series average. The increase was broad-based across the manufacturing and service sectors, led by the former.

In comparison to other UK regions, Wales was second-best performing area on this metric, behind Northern Ireland.

The amount of new orders placed with private sector companies in Wales rose in July, thereby extending the current period of expansion to two years. Having eased to the weakest in this sequence during June, the rate of expansion accelerated in July, and was faster than the long-run series average. Growth was recorded by both manufacturers and service providers, led by the former.