Saturday 31st October 2020
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Activity picks up in the region but business sentiment weakens

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New activity at private firms in the East of England rose at a solid rate in September and work backlogs increased for the first time in nearly two years although business sentiment weakened. The NatWest East of England business activity index rose to 57.7 in September, up from 56.2 in August, as the survey pointed to a ‘strong and accelerated’ increase in activity as businesses re-opened and demand improved.

The amount of new work secured by private firms increased but was softer than in the previous month. New orders won by services firms rose at faster rate than at goods producers. Meanwhile, outstanding business across the region increased in September, putting an end to 22 months of falling backlogs and reflecting  higher workloads and capacity pressures as well as delays in receiving components. But private firms in the East of England were less confident of higher activity levels in a year’s time with positive sentiment falling to the lowest since May and firms in the East appearing less upbeat than the UK average.

Redundancies and restructuring continued to impact workforce numbers although the rate of job-shedding was the softest since March. Rising material prices and the cost of PPE equipment meant input cost inflation was the fastest in the East of the 12 regions covered by the survey. John Maude, NatWest Midlands & East regional board, said: “Companies across the East of England recorded a third successive monthly improvement in business activity following the continued reopening of client businesses... Meanwhile, there were signs of returning capacity pressures after incomplete work accumulated at private sector firms for the first time in almost two years. However, not all was positive after rising Covid-19 case numbers, tightening restrictions and uncertain demand conditions weighed on sentiment.”