- Almost all nations and regions record higher output in April
- Employment trends remain mixed
- Business cost increase sharply, driven by wage rise
Business activity continued to rise across almost all UK nations and regions during April, latest Regional PMI® survey data from NatWest showed. Just half of areas saw an increase in employment, however, with businesses facing a sharp, wage-led rise in costs. 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. Nearly all nations and regions recorded a rise in business activity for the second month running in April. London (index at 57.4) continued to lead growth, recording its steepest rise in output for three months, ahead of the West Midlands
and nations with business activity rising almost universally in March. "London continues to lead the way in terms of business activity growth, but Northern Ireland is now close behind having gained considerable momentum so far this year. A number of other areas have returned to growth in a sign that the upturn is broadening out. "Encouragingly, new orders are now rising across most regions and nations, signalling that demand has turned a corner since last year, although for the most part businesses are still seeing only modest growth in sales. "The picture for the labour market is less clear-cut, with employment increasing in March in a little over half of the 12 monitored regions and nations. Whilst businesses generally e(55.5) and Northern Ireland* (54.5). As was the case in March, only Yorkshire & Humber (47.3) saw activity decline, albeit with the rate of contraction there easing from the month before.
Sebastian Burnside, Royal Bank of Scotland Chief Economist, commented: "Most areas of the UK are enjoying a revival in business activity, with growth even accelerating in most cases in April. "Yorkshire & Humber is the one area where we are yet to see the economy kick into gear, though the region's firms are optimistic about their prospects for the coming year, as is the case across the UK. "Whilst there are generally positive signs for activity and demand, hiring remains somewhat lacklustre. Just half of the 12 nations and regions monitored by the survey saw employment rise at the start of the second quarter, which equated to broadly no change at the UK level. "Businesses appear to be taking a more cautious approach to hiring, at a time when costs are continuing to rise relatively sharply, not least due to staff pay increases. April's near-10% jump in the National Living Wage, and the expansion of its coverage, has lifted rates of business cost inflation once again. Slower increases in prices charged for goods and services in April will be music to the ears of policymakers, but they will be keeping their eyes firmly on these numbers going forward should the economy continue to pick up speed.
Please see the regional reports in full:
UK National (PDF, 1,793KB)
North East (PDF, 1,226KB)
North West (PDF, 2,932KB)
Yorkshire and the Humber (PDF, 1,286KB)
East Midlands (PDF, 1,250KB)
West Midlands (PDF, 1,173KB)
East of England (PDF, 1,220KB)
London (PDF, 1,186KB)
South East (PDF, 1,202KB)
South West (PDF, 1,224KB)
Scotland (PDF, 1,076KB)
Wales (PDF, 1,172KB)
