Manufacturers help drive North West recovery

Latest North West Business Activity Index from NatWest reveals a rise in business activity in September but also warns of further job losses. Tony McDonough reports

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Manufacturing is helping to drive the recovery in the North West


Businesses in Merseyside and across the North West showed strong signs of recovery in September, despite the ongoing COVID-19 crisis – but more job losses are expected.

According to the latest North West Business Activity Index from NatWest, the month-on-month change in the combined output of the region’s manufacturing and service sectors – came in at 56.8 in September. This was well above the 50 no-change mark.

It was down slightly from 57.2 in August and further below July’s recent high. The performance in the North West was similar to the UK as a whole, which likewise saw activity improve for the third month running, but at a slightly slower rate.

The volume of new business reported by firms in the North West was up for the third month in a row in September, pointing to a sustained recovery in demand for goods and services. The rate of growth in new work reached the strongest for two years.

Manufacturers continued to enjoy a steeper increase in new work than their services counterparts and, on the whole, firms in the North West remained optimistic about the outlook for business activity over the next 12 months.

That said, amid concerns about rising unemployment and Brexit uncertainty, expectations eased slightly from August’s three-and-a-half year high to the lowest since June. Confidence in the region was still higher than the UK-wide average, however.

Firms in the North West remained in retrenchment mode in September, reducing payroll numbers for the eighth month in a row. A number of surveyed firms reported redundancies, linked to company restructuring and cost-cutting efforts.

The rate of decline eased to the weakest since March, although it was still marked by historical standards. Underlying data pointed to notable job losses across both the manufacturing and service sectors over the third quarter.

Richard Topliss, chair of NatWest north regional board, said:The good news is that business activity in the North West continued to rise in September, with local firms seeing some further improvement in demand for goods and services.

“Less positive are the signs that growth has waned slightly, with the ‘Eat Out to Help Out’ scheme having ended and local lockdowns posing some further downside risks to the outlook. It’s discouraging to see more job losses, but firms are having to make redundancies simply to survive.”

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