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Pace of growth slows as inflation rises but firms still hiring

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The growth in business activity in the East of England slowed to a three month low in April as the recent upturn in new orders weakened but firms remained confident on their prospects for the year ahead and are continuing to recruit new staff, according to a key survey of purchasing managers. Meanwhile the rate at which firms are increasing prices rose to a new high. The NatWest East of England PMI business activity index fell from to 57.1 in April from 60.1 in March. Although firms noted greater activity, growth was the second-slowest recorded in the current upturn that started in March last year. But optimism amongst firms in the East strengthened slightly on hopes that the easing of Covid restrictions would support demand and supply-side pressures will ease. The pace of job creation in the region slowed to a five-month low but remained strong overall and backlogs of work rose as staff shortages and delayed deliveries took their toll. The rate of input cost inflation quickened to the second-fastest on record driven by higher energy, transport, raw material and labour costs and the rate of inflation of prices charged by firms accelerated to a series high. John Maude, NatWest Midlands & East Regional Board: "The East of England recorded a robust expansion in business activity during April….That said, there was a clear loss in momentum as the upturn was the weakest in three months amid a slowdown in new order growth. Hiring activity also increased at a slightly slower pace in the latest survey period.”

Separately, a stark rise in commodity and energy prices in April pushed an inflation index from advisory firm BDO to an all-time high. The firm’s inflation index saw the largest monthly increase in its ten-year history, jumping 4.29 points to 115.26. The last time the index saw a jump comparable to this was in October 2016, with a monthly uptick of 3.93 points in the aftermath of the Brexit referendum.

Last Updated ( Tuesday, 14 June 2022 06:17 )