The Key Findings

Output growth eases to moderate pace 

Employment broadly unchanged since June 

Business optimism improves 

Private sector output growth in the South East of England cooled to a three-month low in July, according to the latest NatWest PMI® data. The data also revealed a slower increase in inflows of new business and broadly no change in employment, with some firms noting a lack of available skilled staff to replace leavers. Nonetheless, firms remained optimistic towards future growth prospects, signalled by business confidence reaching a five-month high. 

The headline NatWest South East Business Activity Index – a seasonally adjusted index that measures the combined output of the region’s manufacturing and service sectors – was at 53.3 in July, down from 54.6 in June. That said, the figure remained above the 50.0 no-change mark and signalled a moderate rise in business activity across the South East’s private sector. Growth at manufacturing businesses outperformed service-providing companies once again in July. 

Client demand improved once again in July, thereby extending the current phase of expansion to two years. Although the rate of growth softened to a three-month low in July, it remained solid overall. Some firms linked higher inflows of new business to new products. 

Backlogs of work increased for the third month running during July. However, the rate of growth was the slowest over this period. 

Employment was largely flat across both the manufacturing and service sectors in July. Some companies reported difficulty in hiring replacement staff.

July data signalled sharp price pressures across the South East’s private sector. The rate of input cost inflation eased since June, but remained steep overall. According to anecdotal evidence, businesses faced higher wage and fuel bills. Reflecting higher average cost burdens, firms increased their selling prices at a solid pace. 

Respondents in the South East reported the strongest degree of optimism since February during July. Business confidence in the South East’s private sector was stronger than that seen at the national level for the second month running. According to anecdotal evidence, new product launches and planned business expansion underpinned positive sentiment. 


Stuart Johnstone, NatWest Managing Director, London & South East, Corporate & Commercial Banking, Stuart Johnstone, commented: 

“The latest survey data signalled a slowdown in growth across the South East’s private sector. Capacity pressures continued to bite in July, signalled by another rise in work outstanding, although softer new order growth gave a partial respite. Notwithstanding difficulties in hiring new skilled staff and easing growth, confidence among local companies picked up to a five-month high amid planned business investment.” 

About the PMI survey

The NatWest South East PMI® is compiled by IHS Markit from responses to questionnaires sent to participating South East companies.

The headline figure is the Business Activity Index. This is a diffusion index calculated from a single question that asks for changes in the volume of business activity (at service providers) or output (at manufacturers) compared with one month previously. The indices vary between 0 and 100, with a reading above 50 indicating an overall increase compared to the previous month, and below 50 an overall decrease. 

Purchasing Managers’ Index® (PMI®) surveys are now available for over 40 countries and also for key regions including the eurozone. They are the most closely watched business surveys in the world, favoured by central banks, financial markets and business decision makers for their ability to provide up-to-date, accurate and often unique monthly indicators of economic trends. To learn more, go to

Related Posts

51 Why early detection of cyber threats can save your business

Combatting cyber threats is one of the most important challenges facing businesses around the world...

51 Five unexpected ways to motivate your millennial staff

By 2020, millennials are projected to be by far the largest section of the workforce...

51 Where is the best place to buy a luxury home in Marbella?

Marbella has a reputation for being able to deliver everything you could need to live the high life...