Jobs cut substantially in March despite
The PMI® (Purchasing Managers’ Index®)
Eastern England Report is produced for
The Royal Bank of Scotland by Markit
slower decline in output.
Economics.
The report features original survey data
collected from a representative panel of
companies based in Eastern England The Eastern England PMI ® report for March
and operating in both manufacturing and Output
service sectors. pointed to a marked reduction in business activity 60
The Eastern England survey forms part of in the region. The rate of contraction eased
a series of regional surveys published by compared with the month before, but firms still Rising 55
The Royal Bank of Scotland and Markit lowered staffing levels at a considerable pace.
Economics and is derived from the highly 50
regarded national PMI surveys produced Although input prices increased, firms continued
by Markit for the Chartered Institute of to lower output charges during the month. 45
Purchasing and Supply.
Weaker fall in activity
Falling
Register now at 40
www.rbs.com/economics Business activity in the East of England fell
to receive your choice of monthly PMI markedly in March, although the pace of decline 35
report summary emails. The report eased for the third month in a row. The reduction in
summaries will be emailed to you on the
second Monday of each month. the region’s output was slower than the average for
the UK as a whole. The wider economic downturn
The Royal Bank of Scotland Group is one remained the principal factor driving output lower. Order Books
of the world's leading financial services
companies providing a range of retail
Manufacturing firms posted a stronger contraction 60
Rising
and corporate banking, financial markets, of output than services companies. 55
consumer finance, insurance, and wealth The contraction in new orders also weakened
management services. 50
during March, easing to its smallest since May
The Group operates in Europe, the 45
Americas, Asia and the Middle East
2008. Respondents indicated that clients were
serving more than 40 million customers operating with tighter budgets during the current 40 Falling
and employing more than 170,000 people. downturn. The decrease in new work amongst 35
For further information please contact: manufacturers was sharper than at service 30
Thorsten Fischer providers. As new orders fell, increased spare 25
Senior Economist
The Royal Bank of Scotland
capacity was utilised through the completion of
Tel: 0131 626 3954 outstanding business. Backlogs of work declined
E-mail: thorsten.fischer@rbs.co.uk substantially despite the pace of reduction easing
for the second month in a row. Employment 60
Job shedding remained sharp Rising
Employment fell in the East of England at the 55
second fastest pace in the series history in
50
March, extending the current period of decline to
Markit Economics
eleven months. Anecdotal evidence suggested Falling 45
Henley on Thames
Oxon RG9 1EL, UK
that the reduction was largely in response to
Tel: +44 1491 461000
lower output requirements, with manufacturing 40
Fax: +44 1491 461001 the principal source of redundancies. The fall in 35
E-mail: economics@markit.com the region’s employment was broadly similar to
the UK economy average.
The RBS Regional PMIs are produced
by Markit Economics, an independent Output charges continued to fall despite Input costs/prices charged
research company that produces highly- rise in input costs 75
regarded surveys of business conditions in
nations around the world.
Input costs rose for the second month in a row in 70
Input costs
March, and at a faster pace than during February. 65
This was in contrast to the whole UK economy,
60 Rising
The Royal Bank of Scotland and Markit which posted a fall of input prices over the month.
Economics acknowledge the support of
CIPS in the production of this report. Panellists reported that the relative weakness of 55
sterling had led to an increase in some import 50
Prices charged
costs. 45
Falling
Output prices fell for the fifth successive month 40
in March as East of England private sector firms 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
cut charges in an attempt to stimulate demand.
The above charts plot the seasonally adjusted indicators of
There were also reports that output prices had business conditions in Eastern England. Index readings
been cut in response to increased competition for above 50.0 signal an increase on the previous month while
14 April 2009 new business and requests from clients. readings below 50.0 signal a decrease.
PMI Eastern England Report
Output / Business Activity
Q. Is the level of output or business activity at your company higher, the same or lower this month than one month ago?
Eastern England Companies All UK 50 = no change on previous month (seasonally adjusted)
65
Increasing rate of growth
Higher Same Lower Index S.Adj'd S.Adj'd
% % % 50=no chg Index Ind
60
2008 Jul 14.4 55.7 29.9 42.3 43.6 46.5
Aug 14.1 53.3 32.6 40.8 45.8 49.0 55
Sep 16.8 50.5 32.6 42.1 40.1 44.7
Oct 15.0 40.0 45.0 35.0 35.7 42.0 50
Nov 17.0 44.7 38.3 39.4 38.6 38.0
45
Dec 11.7 42.6 45.7 33.0 36.2 38.7
2009 Jan 14.6 41.7 43.7 35.4 39.0 40.6 40 Black line: Eastern England
Feb 20.6 47.1 32.4 44.1 41.0 40.1 Grey line: All UK
Increasing rate of decline
Mar 22.1 52.9 25.0 48.6 45.8 44.1 35
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
March data signalled a marked reduction in business activity amongst Eastern England companies, extending the current
period of contraction to eleven months. However, the pace of decline eased for the third successive month to its slowest since
August 2008. For the second consecutive month, the decrease in activity seen in the region was smaller than the UK economy
average. Anecdotal evidence suggested that the wider economic downturn was the principal cause of the latest reduction. The
contraction of output amongst manufacturers was steeper than at services companies.
New Orders / Incoming New Business
Q. Is the level of new orders or incoming new business at your company higher, the same or lower this month than one month ago?
Eastern England Companies All UK 50 = no change on previous month (seasonally adjusted)
65 Increasing rate of growth
Higher Same Lower Index S.Adj'd S.Adj'd
% % % 50=no chg Index Ind
60
2008 Jul 19.6 41.3 39.1 40.2 40.2 43.5
55
Aug 13.5 46.1 40.4 36.5 41.7 45.7
Sep 19.8 44.0 36.3 41.8 41.8 42.9 50
Oct 16.8 34.7 48.4 34.2 34.8 39.3
45
Nov 7.6 44.6 47.8 29.9 32.9 35.8
Dec 13.5 33.7 52.8 30.3 32.1 36.4 40
2009 Jan 15.3 37.8 46.9 34.2 35.8 39.2 Black line: Eastern England
35
Feb 20.6 42.3 37.1 41.8 38.4 40.1 Grey line: All UK
Increasing rate of decline
Mar 29.4 39.2 31.4 49.0 46.6 42.7 30
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
The decline in new business in the East of England private sector eased markedly during March to its weakest in ten months.
The eleventh successive reduction in new business to the region was also slower than that of the UK economy as a whole.
However, new orders still fell modestly during the month, with panellists reporting cuts in clients’ budgets as the wider economic
downturn continued. Both the sectors covered by the survey posted lower new business, with the rate of contraction steeper
amongst manufacturers.
Business Outstanding
Q. Is the level of business outstanding (i.e. work not yet commenced or completed) at your company higher, the same or lower this month than one month ago?
Eastern England Companies All UK 50 = no change on previous month (seasonally adjusted)
65
Increasing rate of growth
Higher Same Lower Index S.Adj'd S.Adj'd
% % % 50=no chg Index Ind 60 Black line: Eastern England
Grey line: All UK
2008 Jul 13.5 59.6 27.0 43.3 40.6 41.4 55
Aug 9.4 60.0 30.6 39.4 41.6 41.1
50
Sep 11.4 53.4 35.2 38.1 38.1 39.2
45
Oct 10.8 54.8 34.4 38.2 38.5 37.6
Nov 9.5 44.0 46.4 31.5 33.1 35.4 40
Dec 3.4 47.1 49.4 27.0 30.1 35.6 35
2009 Jan 4.1 48.5 47.4 28.4 28.6 36.7
30
Feb 12.9 53.8 33.3 39.8 32.4 36.3
Increasing rate of decline
Mar 9.2 61.2 29.6 39.8 36.9 38.1 25
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
For the eighteenth successive month in March, outstanding business declined amongst East of England private sector firms.
The pace of reduction remained substantial, despite easing for the second consecutive month to its slowest since October
2008. The fall in backlogs was largely due to lower new order levels, which enabled companies to divert spare resources to
complete work-in-hand. Backlogs in the region decreased at a sharper pace than the UK economy average. Manufacturers
posted a faster decline than service sector companies.
All Intellectual Property Rights owned by Markit 2 14 April 2009
PMI Eastern England Report
Employment
Q. Is the level of employment at your company higher, the same or lower this month than one month ago?
50 = no change on previous month (seasonally adjusted)
Eastern England Companies All UK 65
Increasing rate of growth
Higher Same Lower Index S.Adj'd S.Adj'd
% % % 50=no chg Index Ind
60
2008 Jul 10.3 75.3 14.4 47.9 47.0 45.7 Black line: Eastern England
Grey line: All UK
Aug 9.8 73.9 16.3 46.7 47.9 46.6 55
Sep 7.4 76.6 16.0 45.7 46.4 45.4
50
Oct 8.1 64.6 27.3 40.4 43.8 44.1
Nov 2.1 72.3 25.5 38.3 38.3 41.1
45
Dec 4.3 67.7 28.0 38.2 38.3 38.7
2009 Jan 3.9 69.6 26.5 38.7 39.9 38.5 40
Feb 3.0 69.0 28.0 37.5 37.1 38.3 Increasing rate of decline
Mar 3.9 69.9 26.2 38.8 37.5 37.7 35
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
March data pointed to a further substantial decline in employment in the East of England, with the rate of contraction broadly
similar to the UK economy average. The latest round of redundancies was the second fastest in the history of the series,
slower only than the record posted in February. Jobs have now been cut in the region in each of the past eleven months.
Respondents indicated that they had reduced staffing levels in line with decreasing workloads. The fall in employment in the
manufacturing sector was sharper than that seen in services.
Input Prices / Costs
Q. Have average input prices or input costs risen, fallen or remained unchanged this month compared to one month ago?
50 = no change on previous month (seasonally adjusted)
Eastern England Companies All UK 75 Increasing rate of inflation
Higher Same Lower Index S.Adj'd S.Adj'd Black line: Eastern England
% % % 50=no chg Index Ind Grey line: All UK
70
2008 Jul 53.2 45.7 1.1 76.1 73.4 72.6
65
Aug 48.4 48.4 3.3 72.5 73.5 69.2
Sep 36.6 62.4 1.1 67.7 66.6 66.5 60
Oct 26.5 62.2 11.2 57.7 57.9 57.1
55
Nov 18.3 72.0 9.7 54.3 55.2 50.9
Dec 8.7 65.2 26.1 41.3 46.0 49.2 50
2009 Jan 20.8 55.4 23.8 48.5 48.8 50.3 45
Feb 24.0 58.0 18.0 53.0 50.5 49.1
Increasing rate of deflation
Mar 26.5 52.0 21.6 52.5 52.5 49.3 40
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
For the second month in a row in March, East of England companies registered increased input costs. Moreover, the rise
was steeper than that seen in the preceding month. Inflation in the region was in contrast to the UK as a whole, where input
prices fell. Around 27% of panellists reported increased input prices over the month, which was mainly due to the weakness
of sterling, and therefore higher import costs. Both manufacturers and service providers posted rising input prices over the
month, with the rate of inflation slightly faster in the service sector.
Output Prices
Q. Are the average prices charged for goods and services by your company higher, the same or lower this month than one month ago?
50 = no change on previous month (seasonally adjusted)
Eastern England Companies All UK 65 Increasing rate of inflation
Higher Same Lower Index S.Adj'd S.Adj'd
% % % 50=no chg Index Ind
60
2008 Jul 25.3 72.6 2.1 61.6 59.6 57.9
Black line: Eastern England
Aug 16.3 78.3 5.4 55.4 57.2 57.8 Grey line: All UK
55
Sep 20.2 77.7 2.1 59.0 59.5 56.7
Oct 16.0 72.0 12.0 52.0 52.5 53.6
50
Nov 8.6 80.6 10.8 48.9 49.4 50.0
Dec 7.4 78.7 13.8 46.8 46.7 46.2
45
2009 Jan 19.6 71.6 8.8 55.4 48.4 45.6
Feb 6.9 78.2 14.9 46.0 45.6 45.9 Increasing rate of deflation
Mar 9.8 72.5 17.6 46.1 45.8 46.6 40
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Output prices fell in March at a broadly similar pace to the series record posted in February. Output charges in the East of
England have now declined for five months in a row, with the latest reduction sharper than the average for the whole of the
UK. According to respondents, the principal reason for the decrease in output charges was an attempt to stimulate demand.
There were also reports of increased competition for new business and requests by clients for price reductions. The decline in
output prices was slightly sharper amongst service providers.
14 April 2009 All Intellectual Property Rights owned by Markit
PMI Eastern England Report
Regional Comparisons: Output
The graph below shows the regional PMI Output Indexes for the UK. An average of the latest three Share of UK PMI Output Index
GVA, 2006 Last 12 Latest 3 Latest
months is used (see also the table to the right). Steep falls in activity were registered across all (National Statistics) months months month
twelve UK regions in the first quarter of 2009. Northern Ireland was again the worst performing London (17.4%) 46.9 44.3 43.7
region, followed closely by the West Midlands. Meanwhile, London and the North East posted the South East (15.7%) 45.3 42.6 44.7
weakest declines. North West (9.9%) 45.7 40.4 45.1
50 = no change on previous month (-month ave.) Eastern England (9.7%) 42.7 41.9 45.8
52
50 Scotland (8.1%) 41.6 39.0 41.8
48 West Midlands (7.9%) 40.5 34.9 36.6
46 South West (7.9%) 45.5 41.5 40.5
44
Yorks & H’Side (7.3%) 44.3 40.9 43.4
42
40 East Midlands (6.6%) 40.5 38.8 43.9
38 Wales (3.8%) 42.0 37.5 42.3
36 North East (3.4%) 43.7 44.0 47.0
34
N.Ireland (2.3%) 37.4 34.0 34.7
32
UK (100.0%) 44.2 41.6 44.1
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Regional Comparisons: Employment
The graph below shows the regional PMI Employment Indexes for the UK. An average of the latest Contribution to UK PMI Employment Index
Employment, 2006 Last 12 Latest 3 Latest
three months is used (see also the table to the right). All twelve UK regions reported a drop in
(National Statistics) months months month
staffing levels over the three months to March, with the West Midlands posting the sharpest rate of
South East (14.6%) 45.5 40.6 39.3
job shedding. Scotland and the South East registered the slowest reductions in workforce numbers
London (12.3%) 44.6 39.5 40.0
on average in the first quarter.
North West (10.9%) 44.2 37.6 38.5
50 = no change on previous month (-month ave.) Eastern England (9.6%) 43.5 38.2 37.5
52
Scotland (8.7%) 44.6 41.0 42.1
50
48 South West (8.6%) 43.8 39.0 38.3
46 West Midlands (8.6%) 41.3 34.9 35.9
44 Yorks & H’Side (8.2%) 41.8 36.3 37.1
42 East Midlands (7.3%) 41.4 36.9 36.9
40 Wales (4.6%) 41.0 38.5 37.2
38 North East (3.9%) 42.9 39.7 40.9
36 N.Ireland (2.7%) 41.0 36.9 37.1
34
UK (100.0%) 43.4 38.2 37.7
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PMI Survey Methodology
PMI surveys Index numbers
Purchasing Managers’ Indexes (or PMIs) are monthly surveys of carefully Index numbers are calculated from the percentages of respondents reporting
selected companies which provide an advance indication of what is really an improvement, no change or decline. These indices vary between 0 and
happening in the private sector economy by tracking variables such as output, 100 with readings of exactly 50.0 signalling no change on the previous month.
new orders, employment and prices across both manufacturing and service Readings above 50.0 signal an increase or improvement; readings below
sectors. The PMI surveys are based on fact, not opinion, and are the first 50.0 signal a decline or deterioration.
indicators of economic conditions each month. The data are collected using Reasons given by survey respondents for any changes are analysed to
identical methods in all countries and regions so that accurate comparisons provide insight into the causes of movements in the indices and are also used
may be made. to adjust for expected seasonal variations.
Questionnaires are completed in the latter half of each month and are The indexes are seasonally adjusted to take into consideration expected
collected and processed by economists at Markit Economics. Respondents variations for the time of year, such as summer holiday shutdowns and
are asked to state whether business conditions for a number of variables have national holidays such as Christmas.
improved, deteriorated or stayed the same compared with the previous month.
The Royal Bank of Scotland and Markit Economics
The RBS group is one of the world’s leading financial services companies Markit Economics is a specialist compiler of business surveys and economic
providing a range of retail and corporate banking, financial markets, consumer indices, including the Purchasing Managers' Index (PMI) series, which is now
finance, insurance, and wealth management services. RBS group operates available for 26 countries and key regions including the Eurozone and BRIC.
in over 50 countries across Europe, the Americas, Asia and the Middle East The PMIs have become the most closely watched business surveys in the
serving more than 40 million customers and employing more than 170,000 world, favoured by central banks, financial markets and business decision
people. The Group’s brands include RBS, NatWest, Ulster Bank, Coutts, makers for their ability to provide up-to-date, accurate and often unique
Citizens and many other “household name” financial services companies. monthly indicators of economic trends.
DISCLAIMER
The PMI Eastern England Report is issued exclusively for the general information of clients, contacts and staff of The Royal Bank of Scotland plc. The contents are
not a substitute for specific advice and should not be relied upon as such. Accordingly, whilst every care has been taken in the preparation of this publication, no
representation or warranty is made or given in respect of its contents and no responsibility is accepted for the consequences of any reliance placed on it by any person.
WARNING
The intellectual property rights to the RBS Regional PMIs provided herein is owned by Markit Group Limited. Any unauthorised use, including but not limited to copying,
distributing, transmitting or otherwise of any data appearing is not permitted without Markit’s prior consent. Markit shall not have any liability, duty or obligation for or
relating to the content or information (“data”) contained herein, any errors, inaccuracies, omissions or delays in the data, or for any actions taken in reliance thereon. In
no event shall Markit be liable for any special, incidental, or consequential damages, arising out of the use of the data. Markit, PMI and Purchasing Managers' Index are
all trademarks owned by The Markit Group.
4 14 April 2009