Latest Lloyds Bank Regional Purchasing Managers’ Index for the region fell from 58.1 in January to 53.9 in February – reading of above 50 signifies growth whereas below 50 signals contraction.
Business activity in the North West increased at the weakest rate since September 2016 in February, while firms’ input costs rose at the quickest rate in almost six years.
The latest Lloyds Bank Regional Purchasing Managers’ Index (PMI) for the region fell from 58.1 in January to 53.9 in February.
A reading of above 50 signifies growth in business activity, whereas below 50 signals contraction.
Although growth slowed, companies continued to take on new staff, as backlogs of work and new business levels continued to expand, albeit at a slower rate than in January.
The weak pound also put pressure on firms in February, with costs – including raw materials, utilities and wages – rising at the quickest rate in nearly six years.
Companies passed these higher input costs onto customers in the form of increased prices, which rose at the fastest rate since May 2011.
Martyn Kendrick, regional director for the North West at Lloyds Bank Commercial Banking, said: “The region’s economy continued to expand at a solid pace in February, but, although expansion was in line with the UK average, companies generally experienced a slowdown in growth.
“Input cost inflation also hit a 71- month high, which may have caused concern for some companies across the region.
“With the possibility that these pressures could continue, it’s vital that companies across the North West start to plan now so that they are prepare for any future challenges.”