BUSINESS activity in the South West kept expanding last month.

The headline NatWest South West Business Activity Index – a seasonally adjusted figure that measures month-on-month change in the output of manufacturing and service sectors – remained well above the neutral 50.0 level at 61.6 in June.

It was the fourth successive monthly expansion in output, although down from May’s record of 64.4.

New business placed with South West private sector rose for the fourth month running, although slightly lower than May’s peak.

Panel members indicated that the roll-back of Covid-19 restrictions and improved market confidence had boosted sales, with greater tourism cited amid international travel restrictions.

Businesses in the region continued to express strong optimism about the year ahead, with positive sentiment picking up slightly from May and slightly higher than across the UK as a whole.

Paul Edwards, chair of NatWest South West Regional Board, said: “Companies in the South West signalled a further sharp increase in business activity during June, despite momentum softening slightly since May, to indicate that the region continued to recover strongly from Covid-19. The easing of pandemic-related restrictions and return to more normal business conditions helped to lift sales and activity again in June, with firms also commenting that more domestic tourism had also helped to boost order books.

“The recent rebound in economic activity has been accompanied by ongoing supply chain disruption, however, which has led to increased strain on capacity and fed through to steeper increases in costs. The latest survey showed by input prices and output charges rising at record rates, as firms try and maintain their operating margins.”