Defra has published the monthly survey of business conditions in the English rural economy. These data provide the earliest indication of rural business conditions in the English private sector.

The key finds of the survey are;

Business activity rose solidly in February, largely as a result of greater inflows of new work. Some rural manufacturers signalled that output growth was supported by stock replenishment policies. Private sector output has now risen in each of the past eight months.  Data signalled that new order levels rose in February following the weather-related downturn in January. Where a rise in new business was signalled, this was commonly linked to firmer client demand. However, both new orders and output rose at much weaker rates than the respective readings for England as a whole.

Backlogs were depleted in February, albeit at only a fractional rate. Panellists reported that they had sufficient capacity to complete unfinished business, despite the rise in new work. Companies cut jobs at a marginal rate during February in an attempt to reduce costs. This was achieved through the non-replacement of departing staff and phased redundancies.

Although the slowest in three months, input price inflation remained considerable. Rising costs were linked by panellists to higher prices paid for raw materials, with fuel mentioned in particular. Some manufacturers also mentioned that the weakness in sterling had driven costs upwards. Meanwhile, output prices rose at a modest rate, though the fastest since October 2008. Survey respondents reported raising their charges to offset higher costs. However, strong competition meant that companies’ pricing power remained relatively lacklustre.

A copy of the report is available here