UK regional PMI survey report for March 2022

Key findings

• South West and Yorkshire and the Humber led business activity growth
• Output price inflation was at a record high in all but two areas
• Expectations remained positive but eased across the board

UK business activity

March data revealed business activity growth was sustained across most of the UK, supporting a further rise in employment. However, with Russia’s invasion of Ukraine triggering economic uncertainty and escalating prices, firms were less optimistic about the outlook.

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 higher this is, the faster the expansion signalled. 

The steepest increase in business activity was recorded in the South West and Yorkshire and the Humber, as joint best-performing areas (index at 64.3 for both), followed closely by London (63.5).

A positive outlook amid economic uncertainty

Sebastian Burnside, NatWest Chief Economist, commented: “Latest Regional PMI data indicated robust growth in business activity across most parts of the UK in March as the economy continued to recover from the pandemic.

“But while activity has enjoyed a boost from the easing of Covid restrictions, which has in turn provided a strong tailwind for a sustained rebound in regional employment levels, clouds have started to gather as businesses and consumers come under pressure from rampant inflation.

“The fallout from Russia’s invasion of Ukraine has seen global commodity prices soar, leading to sharp – and in most cases – accelerated increases in business expenses at a regional level. Adding to the inflationary environment, businesses are increasingly passing on higher costs to customers, with 10 out of the 12 regions monitored by the survey registering record rises in average prices charged for goods and services.

“On the whole, businesses remained optimistic about the outlook, but the heightened economic uncertainty and escalation in price pressures have seen firms in every part of the UK lower their growth expectations for the year ahead.” 

Please see the regional reports in full:

• UK regions
• Yorkshire and the Humber
• West Midlands
• Wales
• South West
• South East
• North West
• North East
• London
• East Midlands
• East of England