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NatWest Purchasing Manager Index (PMI) Survey, Released July 2021: West Midlands
Posted on 13/07/2021

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NatWest Purchasing Manager Index (PMI) Survey, Released July 2021: West Midlands

The following seasonally adjusted indices vary between 0 and 100, with a reading above 50 indicating an overall increase compared to the previous month, and below 50 an overall decrease.

In Summary:

  • The West Midlands Business Activity Index decreased marginally from 65.5 in May to 64.0 in June, but highlighted the third-quickest rate of expansion since the series started in January 1997. Local companies linked growth to a pick-up in sales, strengthening demand conditions and businesses reopening.
  • Out of the twelve UK regions, the West Midlands region was the fourth highest for the Business Activity Index.
  • The West Midlands Future Activity Index registered at 77.1 as there was hope that the vaccination programme will control the spread of infections allowing restrictions to be uplifted and a recovery in demand. Although the overall level of positive sentiment fell slightly since January’s four-year high, it still remained elevated.

In Detail:

Business Activity Index

  • The West Midlands Business Activity Index decreased marginally from 65.5 in May to 64.0 in June, but highlighted the third-quickest rate of expansion since the series started in January 1997. Local companies linked growth to a pick-up in sales, strengthening demand conditions and businesses reopening.

The following graph shows the West Midlands Business Activity Index trends:

Out of the twelve UK regions, the West Midlands region was the fourth highest for the Business Activity Index, with the North West the highest at 65.0 and Northern Ireland the lowest at 58.2 in June 2021.

The following chart shows the Business Activity Index across all UK regions in June 2021:


Demand

The New Business Index remains over the 50-mark threshold; however, it has decreased from 67.8 in May to 62.2 in June. Firms reported substantial rise in new business, with sales increasing in line with looser COVID-19 restrictions, better demand conditions and improved market confidence.

Exports

The West Midlands Export Climate Index decreased slightly from 59.9 in May to 58.6 in June, but still indicated the second-fastest upturn in export conditions since mid-2006.

Among the top five destinations for West Midlands goods exports, economic growth accelerated in France and Germany. Slower, but still substantial, increases in business activity were seen in the US and Ireland. Growth in China eased noticeably to a 14-month low.

The following table shows the top export markets for the West Midlands in June:

Business Capacity

The West Midlands Employment Index increased from 58.8 in May to 60.8 in June. Private sector companies in the West Midlands recorded a fourth consecutive monthly rise in employment during June. The upturn was associated with a pick-up in new business and associated capacity expansion efforts. The rise in payroll numbers was widespread across the manufacturing and service categories.

The West Midlands Outstanding Business Index has decreased slightly from 59.5 May to 59.2 in June. Firms in the West Midlands reported that capacities came under pressure due to substantial increases in new work, raw material shortages and lengthening supplier delivery times.

Prices

The West Midlands Input Prices Index increased from 74.4 in May to 79.6 in June, which is the twelfth consecutive month. The rate of inflation was steep and the third-fastest on record. Panellists linked the latest increase to limited freight supply and global shortages of raw materials.

For the thirteenth consecutive month, West Midlands private sector companies increased their selling prices. The West Midlands Prices Charged Index increased from 61.1 in May to 62.6 in June.

Outlook

The West Midlands Future Activity Index registered at 77.1 in June. The overall level of positive sentiment fell to a four-month low, but remained elevated by historical standards. Some companies were worried about cautious investment decisions and travel restrictions.

The following chart shows the Future Activity Index across all UK regions in June 2021:

Out of the twelve UK regions, the West Midlands came in at seventh place for the Future Business Activity Index. Yorkshire & Humber had the highest (81.6), and Northern Ireland the lowest (60.6).

Black Country LEP @blackcountrylep Follow us on Twitter

Aug 10

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