Key Findings

  • London and West Midlands the only regions to see growth in output
  • Employment falls in just over half of 12 monitored nations and regions
  • The capital leads broad-based rises in input and output prices


Growth of the UK economy in November was centred on London, according to the latest NatWest Regional PMI® survey. Inflationary pressures were also strongest in the capital, with firms there recording the steepest rises in both input costs and average prices charged for goods and services. Employment meanwhile fell in most areas.         

The PMI Business Activity Index is the first fact-based indicator of regional economic health published each month, tracking the monthly change in the output of goods and services across the private sector. A reading above 50 signals growth, and the further above the 50 level the faster the expansion signalled.

London continued to outperform the rest of the UK regions in November, recording a sharp and accelerated rise in business activity (index at 56.5). The only other area to see growth was the West Midlands (50.6). The North East (44.9) once again recorded the steepest fall in output. However, like in most places, the rate of contraction eased from the month before.



Most areas recorded a fall in new orders in November, albeit with rates of decline generally easing. Businesses in the East Midlands recorded the steepest drop in demand, followed by those in Wales. The West Midlands went against the trend and recorded marginal growth in new business, but the main outlier was London where inflows of work rose markedly.



Slightly more regions recorded a rise in costs pressures than those that registered a moderation in November. London, which was one of the areas where input price inflation ticked up, remained at the top of the rankings. Here, the rise in operating expenses remained faster than the historical trend. The opposite was true in the West Midlands, which posted the slowest overall increase in input costs.   

As well as seeing the steepest rise in cost burdens, firms in London recorded the most marked increase in average prices charged in November. The rate of output price inflation in the capital was at a seven-month high and by far the quickest among the monitored nations and regions. Firms in Northern Ireland* reported the slowest rise in prices charged for the second month running.   



Just over half of the 12 monitored regions and nations recorded a fall in employment in November, the same result as seen in October. Firms in Wales registered the most marked drop in workforce numbers, followed by those in the North East and East Midlands, respectively. Scotland once again topped the rankings for job creation, ahead of the West Midlands.

As has been the case in each of the past five months, all areas of the UK recorded a reduction in outstanding business (i.e. orders not yet started or awaiting completion) during November. Wales registered the steepest drop in backlogs, albeit with the rate of depletion there easing to the weakest since July. The smallest fall in work-in-hand was in London.     



A small majority of areas saw an improvement in business expectations in November. This included the West Midlands, which continued to record the highest overall degree of optimism. The greatest upswing in confidence was in Yorkshire & Humber. Sentiment was weakest in the North East, where it slipped to an 11-month low.  

* PMI survey coverage in Northern Ireland includes construction and retail, as well as manufacturing and services.


Sebastian Burnside, NatWest Chief Economist, commented:

"Although output across the UK as whole is broadly steady, our PMI results reveal some real divergences in economic performance across the nations and regions.

"Firms in London are thriving, with business activity in the capital showing robust growth as we head towards the end of the year. In most other places, output levels are suffering as a consequence of downward pressure on demand from high interest rates and general customer uncertainty. However, we can take some encouragement from the fact that rates of contraction more often than not slowed in November.

"The labour market has undoubtedly cooled amid signs of slack in the economy, though the picture is less clear cut once we start digging deeper into regional trends. In fact, there are still pockets of job creation as businesses demonstrate a resilience to the current economic backdrop.

"It's a mixed picture on the inflation front, too, with firms in half of the 12 regions and nations recording faster increases in average output prices and the remainder seeing either no change or a decline in the rate of inflation. Price pressures remain strongest across services due in large part to the influence of rising wages. It makes sense to see London recording the steepest rises in both input costs and output prices, with its economy dominated by the service sector and firms in the capital enjoying greater pricing power due to improving demand."

November 2023 NatWest Regional PMI® Report
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