North West economy contracts again

PRIVATE sector companies reported a fall in output for the sixth consecutive month in February, according to the latest data from the Royal Bank of Scotland’s Purchasing Managers Index North West report.

A lack of new work was the main reason for the continued contraction of the North West economy in February.

However, offering a small glimmer of hope, the rate of decline was slower than over the last four months.

Manufacturing output fell most sharply and companies are working through their backlogs at the fastest rate ever recorded, according to the report.

The weakness of sterling meant there was an overall rise in input prices in the region during February, reflecting higher import costs, and firms said they were forced to pass on these higher input prices to customers, despite weak market demand.

Philip McKinnon, economist at The Royal Bank of Scotland, said: “Although the rate of decline in output moderated somewhat in February, the near term outlook remains very weak as new workloads continued to decline sharply.

“Moreover, the regional labour market remained in a severe downturn as jobs were shed at a near record pace.”