Business activity rose in all but one of the UK’s 12 nations and regions last month, following broad-based growth in the month prior, according to the latest NatWest Regional Growth Tracker.
As noted in a blog post by NatWest, the Business Activity Index is said to be the “fact-based” indicator of regional economic health released every month, tracking significant change in output of goods and services across the United Kingdom’s private sector.
The update explained that a reading above 50 signals “growth,” and the further above the 50 level the faster the expansion signaled.
A renewed decrease in business activity in Wales in September prevented a second successive month of universal growth across the UK.
Notably, rates of expansion generally eased compared to those seen in August.
Northern Ireland was one of the exceptions, solidifying its position at the top of the growth rankings with its “fastest rise in output since May.”
Sebastian Burnside, NatWest Chief Economist, said that September’s Growth Tracker report showed greater variation in performance across the UK’s nations and regions compared to the situation in August when activity “rose universally.”
They added that output still increased in almost all places, but at one end of the scale there was strong and “accelerated growth” in Northern Ireland and at the other end was a decline in activity in Wales.
Sebastian further noted that at the same time, they saw some divergence in labor market trends, with just half registering a rise in employment in September, down from ten in August.
As stated in the update, it was a similar picture for business confidence, which, whilst generally remaining positive, “decreased in just over half of cases.”
They also mentioned that on the other hand, “price pressures” were consistent across the 12 regions in September, with rates of increase in average charges for goods and services all clustered around the national average, helping make the UK inflation story “somewhat easier for monetary policymakers to read.”
There was broad-based growth in new business in September, the second month in a row in which this has been the case.
The South West topped the rankings, recording a significant increase in new work that was the quickest for two-and-a-half years.
Meanwhile, the East of England, Scotland, and West Midlands reportedly saw only “marginal” improvements in underlying demand.
Trends in business expectations varied in September. More than half of the monitored nations and regions reported a reduction in business confidence, but sentiment has “remained positive across the board.”
Firms in the South East recorded “strongest” overall growth expectations, as well as, the “biggest upswing in optimism.”
Employment growth last month has reportedly been led by Northern Ireland.
Just half of the 12 UK nations and regions monitored reported a “rise in workforce numbers,” down from ten in August.
Wales saw the “steepest” drop in staffing levels, although the decline was only “modest overall.”
Along with further steady growth in outstanding business (i.e., orders and projects awaiting completion) in Northern Ireland, the data indicated a “renewed” rise in the South West, the latter’s first increase in over one-and-a-half years.
Backlogs of work fell in all other cases. And the rates of depletion generally “eased,” albeit only fractionally in Yorkshire & Humber.
The rate at which business costs increased accelerated “slightly” in eight of the 12 nations and regions in September of this year.
This reportedly included the East Midlands, which has registered the “highest overall” rate of input price inflation and one that was just above its long-run average.
The slowest rise in costs was seen in the North West, where the rate of increase was said to be relatively “unchanged” from the month prior.
As was the case with costs, the East Midlands recorded the “fastest overall” rise in average prices charged for goods and services during the month of September 2024.
There, the rate of output price inflation ticked up to a “six-month high” and was quicker than the historical trend.
The report concluded that the gap between highest and lowest (North East) rates of inflation was said to actually be the narrowest on record, however.