North West private sector expansion slows

Expansion in the North West’s private sector slowed in the third quarter of 2015, according to new data.

The latest PMI survey from Lloyds Bank found that while business activity continued to grow during the three-month period, the rate of expansion fell to its weakest level in 33 months due to a 30-month low in the growth of new orders.

The survey also found that job creation in the North West slowed to a point below the average for the rest of the UK. Just 12.5% of North West companies said they increased the size of their team in September.

Elsewhere, prices for both input and output fell for the second consecutive month. Anecdotal evidence, according to Lloyds Bank, has suggested that lower prices for commodities such as oil drove the decline in input prices.

Furthermore, the survey’s participants said they reduced selling prices due to an increased global demand and lowered cost of raw materials.

Commenting on the survey results, Lloyds Bank’s North West director of SME banking, Martyn Kendrick, said: “Private sector activity in the North West was flat at the end of Q3. Moreover, the negligible expansion in output contributed to the weakest quarterly average in business activity since Q1 in 2013.

“This was driven by a further slowdown in new order growth, which dropped to a 30-month low. Subsequently, employment levels increased at a weaker rate, lower than the UK average.”

He continued: “As a result of subdued new order growth, volumes of unfinished business were depleted for the first time since June during the month.

“Meanwhile, input and output prices continued to decline, due to reports of lower raw material costs, particularly oil.”