Private sector choking

Posted on 13 Sep 2010 by The Manufacturer

The UK's private sector led recovery is in danger of stalling with growth having slowed across all areas, the regional Purchasing Managers' Index has shown.

Although every area except static London grew in August, they all did so at a slower rate than in July. The North West, South East and East of England slowed the most.

Collectively, the regions saw their slowest growth since July 2009, registering an overall PMI of 52.3. This compares with 54.1 the month before.

What’s more, employment declined in five out of the nine regions with London and the East Midlands the worst hit. Only the North East posted an increase in jobs and, tellingly, it was the same region that was alone in registering a growth in new orders.

The regional PMI data is compiled by Markit and released in conjunction with the UK’s Regional Development Agencies.

Nigel Jump, chief economist for the South West RDA, said: “This month’s survey results show more softness and raise concerns about the strength of the recovery. The growth in new orders was the weakest since the summer last year and many areas are now seeing a return to net job shedding. The fact that this is happening more quickly in d the South East than elsewhere is an signal for us all.”