Worries grow for North East firms
Jobs cut and optimism fades in the region
BUSINESS activity in the North East fell in April as companies faced a growing range of issues, a new survey says.
The NatWest North East Business Activity Index, which measures change in the region’s manufacturing and service sectors, fell in April as companies faced increased costs, supply chain issues, falling orders and hits to global markets.
Employment levels among North East businesses decreased for the first time in more than a year, with the North East the only UK region to report job cuts in April. Optimism among businesses in the region was at its lowest level for two years.
Concerns over the economy led the Bank of England to last week raise interest rates amid fears of a recession and inflation hitting 10%.
BUSINESS activity in the North East fell in April as companies faced a growing range of headwinds, a new survey says.
The NatWest North East Business Activity Index, which measures change in the region’s manufacturing and service sectors, fell from a score of 50.0 in March to 48.3 in April as companies faced increased costs, supply chain issues and falling orders, as well as hits to global markets.
The fall was the sharpest recorded in the region in more than a year, with the North East the only UK region to post a reduction in activity.
April’s data showed a second successive decline in new business received by North East firms, risings costs and falling optimism. Employment levels among North East businesses decreased for the first time in more than a year, with the North East the only UK region to report job cuts in April.
Richard Topliss, chairman of North regional board at NatWest, said: “Private sector firms in the North East recorded a loss of momentum in April, as business activity was at or below the neutral 50.0 threshold for the fifth time in six months, with the latest fall the quickest for 15 months.
“The reduction came amid a steep contraction in new orders that was the fastest since the early months of the pandemic in 2020.
“Firms commented that output and demand were hindered by higher costs and supply chain disruptions, both of which were exacerbated by lockdown restrictions in China, and the Ukraine war.
“Input costs continued to rise substantially as a result, which contributed to a record increase in prices charged for local goods and services for the third month running.
“As a result, firms were less upbeat about the prospects for activity, with the degree of optimism at the lowest level for two years.”
Concerns over the state of the economy led the Bank of England to last week raise interest rates amid fears of a recession and inflation topping 10%.
The North East frequently suffers the worst economic outcomes and a recent study found that more local firms have become critically distressed
Output and demand were hindered by higher costs and supply chain disruptions
than anywhere else in the country.
The region also has the highest rates of unemployment, though levels have fallen for the last three months.