The North West’s private sector economy ended 2022 on a more stable footing, according to the latest Regional PMI data from NatWest, with business activity holding steady in December after three straight months of contraction.

Elsewhere, the survey signalled a further easing of price pressures, albeit with rates of both input cost and output charge inflation remaining above their historical averages.

The headline North West PMI Business Activity Index – a seasonally adjusted index that measures the month-on-month change in the combined output of the region’s manufacturing and service sectors – registered in line with the 50.0 threshold that separates growth from contraction in December. It was up from 48.5 in November and followed three consecutive sub-50 readings.

The result was a sixth consecutive monthly decrease in intakes of new business. However, the rate of decline eased notably since November, when it was the quickest for the best part of two years, to only a modest pace that was the weakest for three months. The reduction was also less marked than that recorded across the UK as a whole.

Looking ahead, despite sentiment recovering further from October’s recent low, North West firms remain only cautiously optimistic about the outlook amid ongoing concerns about a broad economy slowdown and a squeeze on customer budgets.

Malcolm Buchanan, chair of NatWest North Regional Board, said: “In the context of three straight months of contraction prior to December, a PMI reading of 50.0, signalling a stabilisation in business activity, is a relatively positive result and shows the region ended the year on a firmer footing.

“On the employment front, the North West went against the broader UK trend and registered a further – albeit modest – rise in employment. Encouragement could also be gleaned from the survey’s measures of inflationary pressures, which fell to their lowest since February 2021 and signalled slower prices increases than in any other region.”