BUSINESS activity in the South West expanded in April at its quickest rate since January 2014.

Natwest’s South West Business Activity Index, based on Purchasing Managers Index data, reached 59.8 – up sharply from 50.8 in March.

The rate of expansion was the quickest since the start of 2014, but slightly behind the national average of 60.7.

The New Business Index, adjusted for seasonality, showed a second successive monthly rise in new orders placed with private sector firms, with the rate of expansion reaching a nine-month high.Respondents said the reopening of the economy had improved client confidence and helped drive sales.

Firms generally expected activity to rise over the year and the degree of positive sentiment was the second strongest seen since the series began in 2012.

Employment across the region’s private sector rose for the second month running and job creation was the steepest for nearly six years.

Paul Edwards, chair of the NatWest South West Regional Board, 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.”