Output falls for first time in over two years

ECONOMIC output generated by the North West’s private sector companies fell for the first time in 28 months in August, according to new figures.

The North West Business Activity Index carried out by data analyst Markit fell to 49.5 in August from 50.3 in July, meaning that the combined output of the region’s manufacturing and service sector firms shrank for the first time since early 2009.

Manufacturing orders fell, and where work picked up in the service sector firms attributed it to reduced selling prices, promotional activities or favourable business conditions.

Employment rates also witnessed their sharpest decline for 25 months, and fell faster than the UK average. Among the reasons cited for lower employment were lower workloads, natural wastage and site closures.

Recent cost pressures showed signs of weakening, with reduced momentum from the manufacturing sector being cited as the chief cause, although fuel and raw material prices continued to rise, as did staff costs.

Leigh Taylor, area director for research sponsor Lloyds TSB Commercial, said: “The North West private sector contracted in August, which is not unexpected considering the weakening trend in recent survey periods and the stagnation in July.

“Output fell for the first time in 28 months, contrasting with a slight rise across the UK as a whole. However, this decline was centred on the manufacturing industry, in which both new orders and production levels fell.

“The service sector, meanwhile, continued to post growth.”