BUSINESS activity in the North East fell last month despite the UK picture looking more positive.

The fifth monthly decline in output was linked to weak client demand, however job levels remained broadly stable according to the Lloyds TSB North East Business Activity Index.

The seasonally adjusted index that measures the combined output of the region’s manufacturing and service sectors remained below the 50.0 mark for the fifth consecutive month in January, signalling a further reduction in private sector output.

At 48.1 in January, down from 49.9 in December, this signalled a modest decrease in activity. Output across the UK as a whole, however, increased modestly.

New business in the region fell in January, albeit marginally, following a slight increase in December. New business increased at a UK level.

Employment was broadly unchanged in January, after a reduction in December. Meanwhile, the UK on average saw an expansion of workforce numbers at the start of the year.

Backlogs of work increased for the second month in a row in January, whereas the UK reported a reduction in work-in-hand.