Monday 28th September 2020
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Business activity plummets but hopes surface for recovery

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Private sector business activity in the East plunged in April according to a key survey of purchasing managers although sentiment in the region actually improved as hopes for a recovery rose when the virus crisis measures are relaxed. The East of England was one of five UK regions where optimism on future output improved during April, alongside Wales, the West Midlands, the South West and the South East. But as the demand for goods and services in the region collapsed at the start of the second quarter, the NatWest East of England business activity index fell at the fastest rate since data collection started over 23 years ago, down by over 20 points in April, from 40.7 to 16.2. As more stringent measures hit businesses operations, the downturn in sales led to a jump in spare capacity prompting heavy job cuts. The fall in employment in April in the region was the steepest on record, beyond the reductions during the financial crisis in February 2009. Meanwhile firm's input costs fell for the first time for four-and-a-half years during April, thanks to lower wage bills and fuel costs. Despite the improvement in sentiment, the survey’s future business activity index remained below the historical average, as pessimistic firms are braced for a prolonged impact of the pandemic on activity. John Maude, NatWest Midlands & East regional board, said: “Overall, while the decline was not as severe as that recorded at the national level, the latest survey data point to a substantial downturn in the East of England’s private sector.”