Fears about the worsening state of the Welsh economy have been supported by the latest PMI Wales Report from RBS, which showed that the region’s private sector economy was doing worse than ever.
According to this authoritative study, indexes for output and new business both hit new lows in July, and Wales registered the fastest decline in private sector employment of any UK region.
- In July, private sector output in Wales declined for the fifth time in 2008 so far. Moreover, the rate of contraction was the fastest in the history of the survey. The region also fared worse than elsewhere in the UK on average.
- Consumer concerns surrounding the financial and housing markets had an adverse impact on demand in July, as the volume of incoming new business declined at a series record pace. Of the twelve UK regions, only Scotland registered a sharper fall in new business contracts than Wales in the latest survey period.
- In line with the trend since last October, firms operating in the Welsh private sector economy cut staffing levels in July. Moreover, the rate of contraction was greater than in any other UK region and the fastest in the survey history.
- The rate of increase in firms’ average input costs sharpened (for the fifth time in the past six months) to a new survey record. Energy, metals and food were the most commonly reported sources of inflationary pressure.
- A sharp increase in output prices was indicated by the latest survey data as firms attempted to relieve pressure on profits from rising costs. However, the rate of output price inflation was weaker than the UK average. So, relative to nationwide trends, Welsh firms faced above-average increases in costs but raised charges at a comparatively slow rate.
This is quite a damning survey and I would hope that policymakers in wales are looking carefully at these results. Certainly, it would seem that Wales is not, as some politicians have noted, better placed than the other regions within the current bleak economic environment.
Burying one's head in the sand and going on about the thousands of jobs created (usually part-time, low paid and in sectors that are being hit hardest by the credit crunch) will not help the Welsh business sector one iota at a time when it needs the right type of support and encouragement.
The full PMI report for Wales can be read here
Comments
You remind me a bit of Peter Pan for it was he that said: “Dreams do come true, if we only wish hard enough."
Mind out for that 'cycle' boy - it might just run you over! :-)
I am sure that Dylan , like the rest of us who care about Wales, is wishing hard for good results for our poor old economy. Maybe we need Tinkerbell to spread some fairy dust, ahh well now that is fairy tale rhetoric. Reality needs to be faced and every bit of evidence that feeds into that is a step to sorting it out - if its taken on board
Let me clarify things for you.
On the 10th June, the First Minister 10th said “If you read this morning’s paper, you will see that the Royal Bank of Scotland purchasing managers’ index shows a more favourable picture for Wales than for the rest of the United Kingdom. If you looked at Manpower’s employment outlook survey, you would find the same. Surveys are only surveys, but when two come out on the same day both indicating that the position in Wales is stronger than that elsewhere in the UK, you cannot ignore them both. You might ignore just one survey, but you could have paid some passing attention to two, at least to recognise that they do not share your view.”
Therefore, should we now ignore the PMI results because they are unfavourable and should we ignore the latest data from Lloyds Bank Business Confidence Index which shows that the optimism about prospects for the coming six months has hit its lowest level since the survey began?
As the PM said, two surveys at the same time cannot be ignored and there is some real trouble on the horizon if such statistics continue.
The role of the Assembly Government is to address these issues if they are able to. Business rate reductions, refocusing Finance Wales towards supporting cashflow problems, having an early warning system with branch plants.
All these can be done simply and effectively but that would mean recognising that a problem exists, which they will never do.
As for promoting doom and gloom, you obviously are unfamiliar (or choose to ignore) the Wales Fast Growth 50, which I created and have managed for the last decade.
This is a project which has highlighted the best of welsh entrepreneurship and innovation and which the Assembly are reluctant to support (I wonder why?).
In October, we will, yet again, have fifty firms recognised for their achievements and over four hundred businesspeople celebrating their success at the gala dinner.
That is what talking up the Welsh economy is about, as any of the 320 companies who have been on the list for the last ten years will tell you.
Personally speaking, I believe that the economy will begin to improve slightly towards the end of the year but, unfortunately, the Assembly Government, despite having the opportunity to do so with the powers they already have, have been stuck like rabbits in headlights since the beginning of the year, believing that the old solutions will work.
They won’t and, as a result, thousands of jobs and hundreds of businesses will have been lost.
Keep on blogging !!!