THE South West's economy slowed down last month as snow and freezing temperatures took their toll, new figures reveal.

Research by economists at financial information service Markit showed the region's private-sector output rose in January, but at a slower rate.

Job losses eased too, but price inflation was the strongest recorded since September 2008.

The data comes from Markit's Purchasing Managers' Index (PMI), a monthly survey sponsored by the South West Regional Development Agency (RDA) and designed to provide an advance indication of what is really happening in the private-sector economy by tracking variables such as output, new orders, employment and prices.

The headline seasonally-adjusted Business Activity Index, which measures the combined output of the region's manufacturing and service sectors, posted at 53.8 in January, down from 54.2 the previous month.

The index indicated private-sector output in the South West rising at the start of 2010, with almost 29 per cent of respondents reporting an increase in output, which they attributed to greater inflows of new business and improved trading conditions.

However, the rate of expansion eased for the third successive month to the least marked since June 2009.

Slower growth mainly reflected the unusually bad weather conditions.

By sector, activity levels rose to the greatest extent in manufacturing.

Levels of new business received by firms operating in the South West private sector rose again in January.

Nonetheless, the rate of increase was only modest, and the slowest in the four-month period of expansion.

Anecdotal evidence suggested slower growth primarily reflected snow-related disruptions.

The impact of the snow was particularly marked in the service sector, which saw a marginal decline in new business.

In contrast, manufacturers indicated that new orders had risen markedly since December.

Backlogs were reduced at a marginal rate in January, the slowest in the current 29-month period of decline.

The slower reduction in unfinished business mainly reflected further gains in new work.

Private-sector staffing levels in the region fell in January too, extending the current period of reduction to 22 months.

However, the rate at which job cuts were implemented was only slight, and the slowest since May 2008.

Survey participants said jobs were shed in an attempt to reduce costs. This was often achieved through non-replacement of voluntary leavers.

January figures signalled that average cost burdens increased to the greatest extent since September 2008, with rising staff and raw material costs cited by firms as the primary sources of inflation.

Output prices set by South West private-sector firms fell for the second month running during January, although the pace of reduction was only slight. Panellists mentioned that strong competitive pressures continued to restrict their ability to raise charges.

Shane Vallance, economics and evidence manager at the RDA, said: "The survey suggests the service sector was particularly hit by the recent adverse weather conditions.

"Rising costs and an inability to pass these on fully to customers highlights the tough competitive conditions many businesses are operating under," he said.

"This may have implications for business profits."

Nationally, the Markit data reflected a similar position to that in the South West.

It showed the heavy snowfall contributing to slower growth momentum across the English regions, with output growth having slowed in seven of the nine English regions.

London registered the strongest expansion, with the weakest growth in Yorkshire and Humberside.

Jobs grew in the North West, while staffing levels fell only moderately in other English regions.