Economics

NatWest UK regional PMI report for May 2022

A summary of this month’s Purchasing Managers’ Index reports. Sharp inflationary pressures weigh on regional economic growth in May. Click through to your region below.

14 Jun 2022

Firms across the UK reported a rapid rise in average prices charged for goods and services in May, latest Regional PMI® data from NatWest showed, with nearly half of the areas monitored by the survey seeing record output price inflation amid a continued surge in cost pressures. Sharply rising prices in turn acted as a headwind to demand and weighed on regional economic growth.

Key findings

Firms across the UK hike output prices amid rampant cost pressures
Nine out of 12 regions record slower growth in output…
...while the North East, Northern Ireland and West Midlands post declines

The PMI Business Activity Index is the first fact-based indicator of regional economic health published each month, tracking the monthly change in the output of goods and services across the private sector. A reading above 50 signals growth, and the further above the 50 level the faster the expansion signalled.

Nine out of the 12 monitored areas recorded a weaker rise in business activity in May, while the West Midlands (index at 49.7), Northern Ireland* (49.0) and the North East (48.4) each registered declines. London (56.5) once again topped the rankings in terms of output growth, ahead of Wales (56.1) and Scotland (55.9).

* PMI survey coverage in Northern Ireland includes construction and retail, as well as manufacturing and services.

Sebastian Burnside, NatWest Chief Economist, commented:

“May’s Regional PMI surveys highlight sharp – and in some cases even intensifying – inflationary pressures across the UK. We’re seeing businesses in all areas raising prices charged for goods and services at rates that are either at or very close to record highs as they continue to grapple with rapidly ballooning costs, all of which is further adding to the UK’s cost-of-living crisis.

“These strong price pressures come at a time when the post-lockdown rebound in the economy is fading. Unsurprisingly, we’ve seen a loss of momentum across the UK in terms of business activity, with nine out of the 12 regions covered by the survey seeing growth slow, and the remaining three registering modest declines in output.

“Although rates of job creation have generally cooled in recent months, firms’ willingness to take on additional staff is one area that continues to show resilience, with all regions recording higher employment in May. London once again topped the regional rankings for employment growth, whilst also continuing to see the strongest growth in business activity. However, other areas already look to be in the grip of ‘stagflation’, seeing prices rising sharply whilst activity slows.”

The regional results in full

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NatWest UK regional PMI report for May 2022

Key findings

The regional results in full

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