Sluggish NW output lower than UK average

SERVICES firms posted higher business activity in April but manufacturers noted a fall, leaving the overall rate of private sector expansion across the North West as marginal in April, according to the Lloyds TSB North West PMI data. 
 
The seasonally adjusted index, which measures the combined output of the region’s manufacturing and service sectors, rose slightly to 50.6 in April from 50.4 in March but remained lower than the UK economy average (52.4).       
         
Payroll numbers in the North West private sector fell slightly in April, and the rate of job cuts accelerated to the fastest in 2013 so far. Manufacturing and services companies both indicated lower employment levels, with some mentioning recruitment freezes at their units. In contrast, job creation was signalled in the UK overall.
 
Backlogs of work decreased further in April. The rate of depletion was, however, moderate and eased to a seven-month low. At the UK level, business outstanding also fell, but only slightly.
 
As has been observed in each month since August 2012, input prices in the North West private sector rose during April. The rate of cost inflation was strong and faster than that seen across the UK as a whole. Firms mentioned that fuel, steel and utility costs had all increased.
 
Paul Smith, area director for Lloyds TSB Commercial Banking in the North West, said: “Business activity growth in the private sector across the North West remained weak during April. While services firms saw another increase in business activity, manufacturers reported lower production levels.

“Encouragingly, overall demand picked up during the last month, which if sustained could lead to stronger increases in business activity in the coming months. Meanwhile, operating margins at local companies were again squeezed in April with input costs rising at a much sharper rate than average prices charged to consumers.”