Opening up of hospitality fuels jobs and orders boom across East

Food being served at The Commodore in Oulton Broad

The opening up of hospitality is one of the factors helping orders to recover quickly, NatWest's PMI report suggests - Credit: Danielle Booden

Companies in the East of England are expanding at a record rate out of the economic slump caused by the Covid crisis, new figures suggest.

NatWest’s month-on-month Purchasing Managers’ Index (PMI) Business Activity Index  measures the combined output of the region’s manufacturing and service sector, with figures below 50.0 representing a decline and above showing an increase. 

It showed a fractional rise from 60.9 in March to 61.0 in April – setting a fresh record expansion across the region’s private companies as further easing in pandemic restrictions meant firms continued to resume their operations.

There was a “robust” rise in orders that was broadly in line with the increase in March and which panellists participating in the seasonally-adjusted study linked to greater demand as lockdown measures reduce.

Overall, the rate of growth is among the sharpest in the series history since January 1997 – but firms in the East were less upbeat than in the survey high recorded in March, and less optimistic than the UK average. 

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However, private sector companies in the East of England registered “sharp and accelerated growth” in staffing levels during April, according to the survey. The rate of expansion was the strongest in more than three years as greater demand encouraged businesses in both the services and manufacturing sectors to take on more staff. 

Backlogs extended to three months as incomplete work accumulated with shortages in materials and staff, and supply-side pressures and insufficient workforce numbers were some of the factors behind the increase, according to panellists.

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Of the 12 regions monitored, only the West Midlands recorded a sharper rise in outstanding business.

Cost burdens rose among East firms as the run of inflation, which began last June, continued. This was reportedly due to a shortage in raw materials and higher staff costs. Prices charged by the region’s firms also rose – with the rate of increase unchanged from March’s 40-month high.

John Maude, who sits on the NatWest Midlands and East regional board, said the April date showed another record expansion in business activity across the East of England’s private sector with robust growth in output and new orders recorded. 

“Domestic demand rose strongly over the course of the month, driven by the reopening of leisure, hospitality and other customer-facing activities. 

“Firms meanwhile look to be gearing up for a busy period, with the further relaxations set for May encouraging additions to headcounts,” he said.

“That said, inflationary pressures remained of growing concern as material shortages and higher staff costs added to expenses. 

“Firms saw backlogs increase with difficulties obtaining inputs and transportation delays a common theme over the last few months. 

“While demand is expected to grow as the domestic economy continues to open as we move into the summer, we could see further constraints to supply if tighter restrictions remain across international markets.”

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