North East businesses reported a decline in employment and a slowdown in business activity growth during March, according to the latest research from Lloyds.
The bank’s purchasing managers’ index (PMI) survey is based on responses from manufacturers and service providers about the volume of goods and services produced during March compared with a month earlier.
The North East’s recent upturn seems to have lost its legs, and with business activity stagnating in March employers have focused less on recruitment.Leigh Taylor
The North East findings are based on businesses across Northumberland, County Durham, Tyne and Wear and the Tees Valley.
It shows business output levels stagnated, following a strong start to 2017 for the region.
The latest PMI reading dropped to 50.1 in March, down from 54.9 in February, the lowest figure the region has seen in eight months. A figure above 50 signifies expansion in business activity, while a reading below signals contraction.
March also saw a drop in confidence for the first time since November.
Slowing growth rates also resulted in a drop in employment, unlike the rest of the UK.
Input costs continued to rise sharply on the back of the weak pound and salary pressures but inflation eased, which was reflected in slower price increases from local businesses.
Leigh Taylor, regional director for the North East at Lloyds Bank Commercial Banking, said: “The North East’s recent upturn seems to have lost its legs, and with business activity stagnating in March employers have focused less on recruitment.
“The region has fallen behind the pace across the UK and cost pressures remain strong. Competitive pricing should help recover some of the ground lost.”