• Output contracts in nine of out 12 monitored regions and nations
• Local labour markets under pressure but showing signs of resilience
• Input cost inflation generally slows

Most areas of the UK saw a fall in business activity in October amid broad weakness in demand, according to the latest NatWest Regional PMI® survey. Employment also declined in the majority of cases, albeit generally more slowly than in September. More often than not, business costs rose at a slower rate in October. 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. London remained the UK's top-performing region for output growth in October, its business activity index coming in at 53.8. It was one of just three areas (out of 12 monitored) where output rose during the month, alongside the West Midlands (50.7) and South West (50.1). Firms in the North East (43.5) recorded the most marked decline in business activity, followed by those in Wales (45.0)

Sebastian Burnside, NatWest Chief Economist, commented:

"Most regional economies remained under pressure at the start of the fourth quarter, with activity falling in nine of the 12 monitored areas. 

"London remains the main bright spot, having seen activity not only grow in October, but also at a solid rate. Businesses in the capital are reporting robust customer demand, which contrasts with the situation in almost every other area. 

"There has been greater caution around hiring in recent months as businesses contend with lower activity and rising costs, and we saw further evidence of this in October as employment once again fell across the majority of areas. However, the latest results did at least point to some signs of resilience across local labour markets, with rates of job shedding generally easing and three regions even recording renewed rises in employment.       

"Whilst business costs generally rose more slowly in October, this didn't always translate into slower increases in prices charged for goods and services as rates of inflation ticked up in half of cases. There is some stickiness in inflationary pressures, driven by ongoing wage increases and the recent resurgence in fuel prices."

Please see the regional reports in full:

UK National (PDF, 281KB)

North East (PDF, 371KB)

North West (PDF, 423KB)

Yorkshire and the Humber (PDF, 389KB)

East Midlands (PDF, 403KB)

West Midlands (PDF, 380KB)

East of England (PDF, 384KB)

London (PDF, 351KB)

South East (PDF, 386KB)

South West (PDF, 385KB)

Scotland (PDF, 361KB)

Wales (PDF, 380KB)