Region’s economy ‘more buoyant’ than other parts of the country, survey suggests
PUBLISHED: 10:09 09 November 2020 | UPDATED: 10:31 09 November 2020
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The East of England is shedding jobs at a lower rate than other parts of the UK — and is seeing modest growth in new work, a key business barometer suggests.
But while the region was the only one in the UK to see growth in new business versus a decline, it also saw the sharpest rise in costs, according to the NatWest Purchasing Managers’ Index (PMI).
The east’s business activity was also the second highest after the south east of England.
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The region is the only one to see slight growth in new business, with a decline across the UK as a whole.
The seasonally-adjusted monthly indices look at purchasing managers’ responses, with a reading above the halfway point of 50 indicating a rise, and below 50 a fall.
It found the combined output of the region’s manufacturing and service sectors fell to a four-month low of 54.9 in October, from 57.7 in September.
But the latest figure signalled a solid rate of growth in business activity which was much stronger than the UK average.
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Survey respondents indicated the rise was largely a continuation of the recovery in demand following the easing of pandemic restrictions.
Although there were redundancies and restructures, the rate of job shedding was the lowest in seven months.
The region’s firms were also feeling cost pressures building in October to reach a 13-month high. Those surveyed suggested the latest increase in operating expenses was driven by higher raw material costs and the added expense of personal protective equipment PPE equipment.
John Maude, of NatWest Midlands & East Regional Board, said although job cuts continued, they had eased considerably with firms staying optimistic about their growth prospects in the year ahead.
“Expansion in business activity and new business continued into the final quarter at private sector firms in the East of England, with another solid uptick reported in the region,” he said.
“Price pressures rose markedly as firms faced the added cost of PPE equipment and higher raw material prices. Cost burdens were partially passed on to consumers during October.
“There were signs of a movement towards a second dip as new business moderated to a four-month low. With a second lockdown announced, firms in the East of England look set for another challenging period with the onset of a second lockdown.”
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