OUTPUT growth in the southwest slowed further in October and was the weakest for 21 months according to the recent PM- Business Survey Data.
Nevertheless, at 54.0, the seasonally adjusted Business Activity Index signalled a solid rate of growth that was above the UK average for an eighth consecutive month.
The rise in output was underpinned by continued growth of incoming new business.
However, the rate of increase in new work was only moderate and the slowest in the current 29month period of expansion.
Employment in the south-west private sector economy continued to rise in October, but jobs growth eased to an eightmonth low.
Moreover, the increase in staffing levels in the region remained the strongest of all 12 UK areas covered.
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There was little evidence of capacity constraints in October.
Continued jobs growth and the slowdown in new orders helped firms to reduce the volume of outstanding business for the second month in a row.
Firms reported a marked rise in their average costs in October, and the rate of input price inflation edged up from last month.
There were reports that higher prices for various raw materials (including fuel and cardboard) had contributed to the rise in firms' average costs.
South-west firms raised their output prices at the fastest rate for four months in October.
Sharper charge inflation was evident at both manufacturers and service providers, attributed to passing on higher costs to customers.
Chris Elias is senior director for The Royal Bank of Scotland (RBS) commercial banking team in Swindon. The above comments are based on September's PMI Business Survey Data for the South West, produced for RBS by NTC Economics.
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