Wales Business Activity Falls at Fastest Rate Since December 2011
The health of the private sector in Wales deteriorated during July, as output and new orders declined again. Workforce numbers also decreased over the month. Meanwhile, both input costs and output charges fell in July.
At 47.4 in July, down from 49.0 in June, the headline seasonally adjusted Lloyds TSB Wales PMI Business Activity Index was below the neutral 50.0 mark for the second successive month.
The latest reading signalled a solid reduction in output at Welsh private companies that was the fastest in 2012 to date. Whereas production in the manufacturing sector expanded, services companies registered a marked contraction in business activity. Business activity also fell across the UK as a whole.
The volume of incoming new business fell in the Welsh private sector for the third successive month. Manufacturers recorded an expansion in new orders, but services firms signalled a further contraction. For the UK as a whole, new order volumes increased at a slight pace.
Workforces at private sector companies in Wales contracted at a slight pace. A decline in employment was registered in both the manufacturing and services sectors. Moreover, the pace of contraction was faster in the service sector.
Meanwhile, job creation was recorded for the seventh consecutive month in the UK overall. Backlogs of work fell at Welsh private sector firms. Services and manufacturing companies both signalled a reduction, with the pace of decline faster among the latter.
Welsh private companies signalled the first decrease in input costs in 40 months. While manufacturers noted a decline in input prices, service firms signalled further inflationary pressures. In contrast, total input costs increased at the UK level.
Output prices decreased for the fifth successive month in the Wales private sector. Manufacturers signalled a reduction in charges, but services companies registered a rise. Moreover, the rate of decline was slight and broadly similar to that recorded for the UK as a whole.