Member Article

North East private sector activity falls for first time since April 2013

Businesses in the North East have seen a decline in new work, causing the region’s first to scale back output, according to a report from Lloyds Bank North East.

The headline Lloyds Bank North East Business Activity Index, a seasonally adjusted index that measures the combined output of the region’s manufacturing and service sectors, dipped below the crucial 50.0 threshold for the first time in two-and-a-half years.

At 49.8 in October (September: 52.2), the respective index was indicative of a marginal rate of reduction, however. The region’s struggling manufacturing industry has been deemed the main source of weekend as the services sector booms.

The latest decrease in incoming new work ended a 30-month sequence of growth. However, Lloyds highlighted that the pace of reduction was ‘only slight’.

Manufacturing order books fell, with firms reporting weaker demand from both domestic and overseas customers, while service providers recorded a further rise in new business, which panellists linked to the securing of new clients.

The report also found that staffing levels in the region’s private sector continued to rise in October. Nonetheless, the rate of job creation was the weakest recorded since January.

Employment growth in the service sector more than offset job shedding at manufacturers, including 1,700 job losses at the SSI steel plant in Teesside.

Commenting on the Lloyds Bank Commercial Banking North East PMI survey, Leigh Taylor, area director for SME Banking in the North East said: “Economic conditions in the North East private sector worsened in October, with faltering demand placing downward pressure on output which fell for the first time since April 2013.

“Manufacturers in the region struggled but the data shows a resilient service sector. Business activity, incoming new work and employment in the service sector all continued to rise at the beginning of the fourth quarter.”

This was posted in Bdaily's Members' News section by Ellen Forster .