Economy hit by slowdown in growth
Nov 12 2007 by Aled Blake, Western Mail
Wales one of three UK areas to see employment go down
A SLOW down in growth and falling confidence in business owners is beginning to hit the Welsh economy, new research suggests.
According to the October’s PMI Business Survey Data, produced for the Royal Bank of Scotland, Wales was one of three areas of the UK to register a fall in employment.
The research found growth of private sector business activity slowed markedly in October, reflecting a moderation in the rate of expansion of new orders.
The seasonally adjusted Business Activity Index expanded for the 55th consecutive month in October, but the rate of expansion fell to a four-and-a-half year low of 51.3, from 54.7 in the previous month.
Slower growth of activity reflected a similar weakening in the rate of expansion of new orders during October.
Panellists, particularly those in the service sector, reported that a softening of market demand conditions was the principal factor driving the rate of new business growth down to a 52-month low.
RBS senior economist Robert Gardner said, “Business activity in the Welsh private sector extended the current period of expansion to 52 consecutive months, but the rate of growth was at its slowest since April 2003.
“Growth in business activity and new orders was positive in October but slowed markedly reflecting a softening of market conditions, particularly in the service sector.”
Weaker growth of activity and new orders prompted firms to make cutbacks to their staffing levels in October for the first time in three months.
There were a number of reports linking redundancies to cost-control initiatives. Although only modest, the fall in employment in Wales contrasted with a solid expansion of staffing levels across the wider UK private sector economy.
The PMI survey recorded “lacklustre” expansion of new work freed up a greater degree of operating capacity to be utilised for the completion of existing orders. Backlogs of unfinished work declined at the fastest pace for six months.
Meanwhile data from the CBI reported that demand for goods from small and medium-sized manufacturers has flattened after nine months of solid growth.
And firms have become more pessimistic about the business environment, according to the CBI’s latest quarterly SME survey published today.
The experiences of small and medium-sized (SME) firms differed over the last quarter however. Medium-sized manufacturers hit a 12-year high in export order growth while reporting a moderate decrease in domestic orders. Meanwhile, small firms saw slight growth in domestic orders and stable export orders.
Steve Sharratt, chairman of the CBI’s SME Council, said, “The nine month run of growth that the sector has enjoyed has cooled off, but the detail is more mixed, with medium-sized firms enjoying very strong overseas demand.
“The supply of skilled labour continues to worry SME firms, but it is heartening that they have reacted by expanding and upskilling their workforces.
“However, looking ahead, businesses are less optimistic and overall demand is forecast to weaken, so it is vital the Government supports this sector.”\\\\
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Wales one of three UK areas to see employment go down
A SLOW down in growth and falling confidence in business owners is beginning to hit the Welsh economy, new research suggests.
According to the October’s PMI Business Survey Data, produced for the Royal Bank of Scotland, Wales was one of three areas of the UK to register a fall in employment.
The research found growth of private sector business activity slowed markedly in October, reflecting a moderation in the rate of expansion of new orders.
The seasonally adjusted Business Activity Index expanded for the 55th consecutive month in October, but the rate of expansion fell to a four-and-a-half year low of 51.3, from 54.7 in the previous month.
Slower growth of activity reflected a similar weakening in the rate of expansion of new orders during October.
Panellists, particularly those in the service sector, reported that a softening of market demand conditions was the principal factor driving the rate of new business growth down to a 52-month low.
RBS senior economist Robert Gardner said, “Business activity in the Welsh private sector extended the current period of expansion to 52 consecutive months, but the rate of growth was at its slowest since April 2003.
“Growth in business activity and new orders was positive in October but slowed markedly reflecting a softening of market conditions, particularly in the service sector.”
Weaker growth of activity and new orders prompted firms to make cutbacks to their staffing levels in October for the first time in three months.
There were a number of reports linking redundancies to cost-control initiatives. Although only modest, the fall in employment in Wales contrasted with a solid expansion of staffing levels across the wider UK private sector economy.
The PMI survey recorded “lacklustre” expansion of new work freed up a greater degree of operating capacity to be utilised for the completion of existing orders. Backlogs of unfinished work declined at the fastest pace for six months.
Meanwhile data from the CBI reported that demand for goods from small and medium-sized manufacturers has flattened after nine months of solid growth.
And firms have become more pessimistic about the business environment, according to the CBI’s latest quarterly SME survey published today.
The experiences of small and medium-sized (SME) firms differed over the last quarter however. Medium-sized manufacturers hit a 12-year high in export order growth while reporting a moderate decrease in domestic orders. Meanwhile, small firms saw slight growth in domestic orders and stable export orders.
Steve Sharratt, chairman of the CBI’s SME Council, said, “The nine month run of growth that the sector has enjoyed has cooled off, but the detail is more mixed, with medium-sized firms enjoying very strong overseas demand.
“The supply of skilled labour continues to worry SME firms, but it is heartening that they have reacted by expanding and upskilling their workforces.
“However, looking ahead, businesses are less optimistic and overall demand is forecast to weaken, so it is vital the Government supports this sector.”\\\\
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Labels: employment data, United Kingdom, Wales
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