Yorkshire and the Humber businesses see steep increases in business activity
Business conditions continued to improve across the region in September, according to the NatWest Yorkshire and Humber PMI.
Business activity and new orders both rose, despite rates of growth softening since August.
As a result, companies expanded their workforce again, and remained optimistic that activity levels would increase over the next year.
Input prices, however, have continued to rise sharply amid reports of greater staffing costs and a weak sterling exchange rate.
The headline NatWest Yorkshire & Humber Business Activity Index is a seasonally adjusted index that measures month-on-month changes in the combined output of the region’s manufacturing and service sectors.
The index posted above the neutral 50.0 level at 55.2 in September, down from 56.1 in August, to signal a further increase in business activity across the region that outpaced the UK average.
By sector, manufacturers recorded a stronger rise in output than their service sector counterparts.
According to respondents, increased demand across both domestic and international markets supported the latest upturn in sales. Growth in new orders also remained quicker than the national trend for the third month running.
Rising business requirements led firms to expand their payrolls again in September. The rate of jobs growth was only fractionally slower than August’s nine-month record and above the UK average.
Yorkshire and the Humber companies were also optimistic that output would increase over the next year, but the level of positive sentiment dipped to a three-month low in September.
Richard Topliss, chair of NatWest North Regional Board, said: “The latest NatWest PMI data showed that growth momentum across the Yorkshire & Humber private sector remained strong, despite the region slipping from the very top of the regional rankings in September.
“Notably, companies in Yorkshire & Humber continued to register quicker expansions in business activity, new orders and employment compared to those seen on average across the UK.
“According to panellists, greater new orders from both domestic and overseas clients supported the latest upturn, with some manufacturers commenting that the weaker pound had helped to lift sales in key markets like Europe and the US.
“On the other hand, the relatively weak value of sterling contributed to another marked rise in input costs, as companies widely commented on higher prices for imported items. Greater staffing costs were also commonly cited by firms. Notably, the rate of increase in operating expenses continued to outpace that seen at the UK level.”
Nick Stamenkovic, NatWest economist, added: “Business output in Yorkshire and Humber slipped in September but remains firmly in positive territory. Improved demand ensured another healthy monthly rise in employment though business sentiment edged lower”.
