BUSINESS activity across Swindon, Wiltshire and the south west as a whole has shot up rapidly.

The latest data from NatWest shows a sharp and accelerated rise which was supported by an increase in new businesses.

The headline NatWest South West Business Activity Index – a seasonally adjusted index that measures the month-on-month change in the combined output of the region’s manufacturing and service sectors – posted 59.8 in April, up from 50.8 in March.

This signalled a second successive monthly rise in output and the rate of expansion was the steepest recorded since the start of 2014, albeit slightly softer than the national average (index at 60.7).

Adjusted for seasonality, the New Business Index pointed to a second successive monthly rise in new orders placed with south west private sector firms in April, plus the rate of expansion accelerated to a nine-month high and was sharp overall.

But growth remained softer than that seen across the UK as a whole. According to respondents, the reopening of the economy and improved client confidence helped to drive sales growth in April.

Firms generally anticipated business activity to rise over the next year. The degree of positive sentiment was the second-strongest seen since this series began in July 2012 (behind February 2021), and broadly in line with the national average.

This optimism was often linked to expectations of an end to the pandemic and restrictions, and a recovery in economic conditions and customer demand.

Employment across the south west private sector rose for the second month running in April. The rate of job creation quickened to a sharp pace that was the steepest recorded for nearly six years.

According to panellists, improved confidence around the business outlook and expectations of firmer client demand drove the latest upturn in workforce numbers. Employment rose at a similarly sharp pace across the UK as a whole in April.

The latest survey data signalled a renewed upturn in outstanding work at south west private sector companies in April. Not only did it mark the first increase for two-and-a-half-years, the rate of accumulation was the steepest seen since January 2014. Firms indicated that capacity pressures stemmed from rising order numbers and a lack of staff and raw materials.

At the national level, outstanding business rose for the second month running, but the upturn was not as strong as that seen in the south west.

Average input costs faced by private sector businesses in the region rose for the 11th month in a row during April. The rate of inflation picked up to the strongest for just over four years and was rapid overall.

A number of monitored companies commented that higher cost burdens stemmed from greater prices for raw materials, transportation and staff. A similarly sharp increase in input costs was seen at the national level in April, where the rate of inflation also picked up to the steepest since February 2017.

As part of efforts to ease pressure on profit margins, companies in the region raised their prices charged again in April. There were also mentions that firmer demand conditions had enabled companies to increase their prices. Notably, the rate of inflation was the fastest seen since August 2008 and substantial. The increase was also sharper than the UK-wide trend.

Chair of the NatWest South West Regional Board Paul Edwards said: "“Latest PMI data indicated that growth momentum picked up sharply across the South West in April as virus-related restrictions began to ease.

"Firms registered the quickest rise in business activity for over seven years, which was supported by a rapid increase in new work.

"As a result, companies were strongly optimistic about their prospects for the year ahead, which helped to drive the steepest increase in employment for nearly six years, as firms looked to boost capacity for the months ahead.

"Despite the stronger rise in staff numbers, backlogs of work rose markedly, which firms partly attributed to raw material shortages.

"Costs remained a key area of concern, which continued to increase sharply in April. As a result, firms raised their prices to the greatest extent since August 2008."