Businesses operating in the south west registered sharper increases in business activity, new work and employment at the end of the first quarter as market conditions continued to revive from pandemic-related disruption.

However, price pressures intensified, with a quicker rise in input costs feeding through to an unprecedented increase in output charges. At the same time, concerns over rising costs and shortages of inputs and labour dampened overall business confidence, which slipped to its lowest for nearly two years.

The headline NatWest South West Business Activity Index – a seasonally adjusted index that measures the month-on-month change in manufacturing and service sectors – rose from 59.6 in February to 64.3 in March, to signal the sharpest increase in output since May 2021. The seasonally adjusted New Business Index pointed to a further improvement in overall new orders received.

Furthermore, the rate of growth quickened for the third month in a row to reach the strongest since May 2021. Greater intakes of new business were linked to stronger customer demand as the impact of the pandemic continued to fade.

Paul Edwards, chair of NatWest South West Regional Board, said: “Business activity across the south west surged at the quickest rate for 10 months in March as the impact of the pandemic continued to fade and customer demand strengthened further.”

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