New study from NatWest shows business activity in the North West is continuing to fall but at a slower rate than previously, offering signs of ‘stability’. Tony McDonough reports

Business activity in the North West is continuing to fall but there are signs the private sector may be stabilising.

NatWest’s latest Growth Tracker showed further contraction in business activity in January but also the rate of fall had slowed. Its North West Business Activity Index registered 49 in January.

Although this was still below the 50 no-change threshold that separates growth from contraction, it was up from 46.9 in December and the highest reading for three months.

Local businesses reported that softer demand in the domestic market was the main reason why activity had fallen, linking this to tighter budgets among customers and low confidence.

Private sector employment decreased across the North West in January, the fourth month running in which this has been the case. Businesses hoped that greater marketing efforts, diversification and new products would lead to higher activity.

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But concerns for the economy increasingly dampened optimism. Malcolm Buchanan, chair of the NatWest North Regional Board, said: “The North West private sector enjoyed more stability in January compared to the situation at the end of last year.

“Business activity edged down only slightly and at the slowest rate for three months. Local companies are still looking to the future with some optimism, even though confidence has taken a knock in recent months.

“The Bank of England’s interest rate cut last week means that policy is now less restrictive, with further loosening expected in the year ahead.”