South West private sector companies continued to face challenging business conditions at the end of the second quarter of the year.
Business activity fell amid a drop in new work, according to the latest NatWest PMI survey.
Although it was only a modest contraction of output, it was the weakest quarterly performance since the first quarter of 2009.
Companies said that relatively subdued demand conditions amid an uncertain economic and political environment had dampened sales, while also suggesting pre-Brexit stockpiling efforts earlier in the year had impacted on new work.
Greater cost burdens were linked to higher prices for raw materials and fuel, as well as an unfavourable exchange rate.
Prices data meanwhile showed a marked rise in input costs, which prompted firms to hike their selling prices again in June.
At the same time, relatively weak client demand and an increase in staff numbers contributed to the quickest reduction in outstanding work for over six years.
Businesses in the region also remain positive for the 12-month outlook, with many firms planning new product launches, and employment rose for the second month in a row.
Chris Preston, chair of the NatWest South West Regional Board, said: “Uncertainty over the outlook continued to weigh on activity across the South West. Unless demand picks up companies may look to reduce their headcounts going forward."
