West Midlands economy contracting at faster rate than any other region

Up and down arrows on wood chippingsThe latest Purchasing Managers Index (PMI) report for the West Midlands reaffirms the declining economic outlook. Business activity and new orders fell at faster rates in February, with manufacturing particularly weak as the impact on the automotive sector is more acutely felt.

The PMI is one of the leading indicators monitored as part of the regional monthly economic outlook report prepared for the West Midlands Taskforce.

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West Midlands’ economy continues to feel economic pain

Up and down arrowsThe prospects for the regional economy continue to worsen in the short term as new data further emphasises a deepening contraction of economic activity.

The CIPS/Markit Purchasing Managers Indices (PMI) for the West Midlands were released on 10 Novemember. The PMI is an important indicator of the short term economic prospects and it is widely used to inform policy

The PMI pointed to an acceleration of the downturn in October. The key headlines are:

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Economic activity in the West Midlands continues to slow

Latest economic output data suggest that the regional economy continues to slow down.

The Purchasing Managers Index (PMI) is based on surveys undertaken by Markit Economics on behalf of the Royal Bank of Scotland. It is an important indicator of current market conditions.

The index is derived such that a level of 50 signals no change since the previous month, above 50 signals an increase (or improvement) and below 50 a decrease (or contraction). The greater the divergence from 50, the greater the rate of change signalled.

The latest data from the PMI West Midlands report (pdf, 232kb) signalled the fastest decline in business activity in the region in almost seven years in June, as new business fell for the eighth month running. Continue reading