West Midlands economy ends 2023 with regained growth momentum – report
The last NatWest PMI results for 2023 pointed to a combination of strengthening growth and rising price pressures across the West Midlands.
With sales prospects coming to fruition and demand conditions remaining resilient, new orders rose at the quickest pace in six months.
Subsequently, there was a faster uptick in output and an improvement in business confidence. On the price front, input costs and output charges increased at stronger rates.
The headline Business Activity Index – a seasonally adjusted index that measures the month-on-month change in the combined output of the region’s manufacturing and service sectors – rose from 50.6 in November to a six-month high of 51.5 in December, indicating a quicker rate of expansion that was the third-best of the 12 monitored UK regions and nations.
New business intakes at private sector companies in the West Midlands continued to increase in December, therefore stretching the current sequence of expansion to 11 months. Out of the 12 monitored UK regions and nations, only London saw a faster rise in new orders.
West Midlands companies became more upbeat regarding the prospects for output in 2024. The overall level of positive sentiment rose to a three-month high and was above its long-run average.
As has been the case on a monthly basis for three-and-a-half years, input prices at West Midlands firms rose in December. Although considerably lower than most of those seen over that period, the rate of inflation was sharp and hit a four-month high.
In line with the trend for input costs, there was a quicker upturn in prices charged for West Midlands goods and services during December.
After increasing in the previous two months, payroll numbers at West Midlands companies were broadly unchanged in December. This was signalled by the respective seasonally adjusted index posting only fractionally below the 50.0 no-change mark
For the thirteenth month in a row, private sector firms in the West Midlands signalled a decline in unfinished business levels during December. Despite slowing since November, the pace of depletion was solid and broadly aligned with the long-run series trend.
Rashel Chowdhury (pictured), NatWest Midlands and East Regional Board, said: "The West Midlands private sector economy ended 2023 in a much better way than it started, sustaining growth of demand for goods and services alongside a further uptick in output.
“On both fronts, the expansions were among the best seen across the 12 monitored UK regions and nations. Confidence in the outlook for 2024 strengthened, while rates of input cost and output charge inflation remained among the lowest seen in at least three years despite ticking higher."
