Regional business activity growth quickens in April

NatWest’s Yorkshire & Humber PMI Business Activity Index  signals a stronger expansion in private sector business activity across Yorkshire and  Humber.

The a seasonally adjusted index that measures the month-on-month change in the combined output of the region’s manufacturing and service sectors rose to 52.5 in April, from 50.7 in March,

But the region was one of the weakest performers across the UK in April, lagging behind the national average once again. In fact, compared to the 11 other monitored parts of the UK, only the East Midlands and Wales registered weaker expansions.

Malcolm Buchanan, chair of the NatWest North Regional Board, said, “There were positive developments for Yorkshire & Humber businesses in April, with activity growth quickening and confidence improving. There was even a modest strengthening in demand conditions, and firms responded by boosting their staffing capacities.

“That said, compared to other parts of the UK, the region’s performance is not so impressive. Growth was notably weaker than seen for the UK as a whole in April, with only the East Midlands and Wales recording weaker rates of expansion in business activity.

“Meanwhile, although cost pressures eased further, they remained substantial, reportedly due to higher wage demands in response to the cost-of-living crisis.”

April survey data signalled a third successive monthly increase in new business received by private sector companies in the region. The improvement strengthened slightly and was the quickest since last August, but only marginal overall. 

The rise in new orders seen across the region continued to lag behind the UK as a whole. Only the East Midlands and Northern Ireland saw slower upturns.

Private sector companies remained firmly upbeat towards growth prospects over the coming 12 months, latest survey data showed. Furthermore, the level of positive sentiment strengthened slightly to an 11-month high. New product launches, investment plans and expectations of a gain in market share supported firms’ growth projections, according to anecdotal evidence.  

The seasonally adjusted Employment Index posted above the 50.0 no-change mark in April, signalling an expansion in staffing levels across Yorkshire & Humber. The rate of job creation quickened markedly since March to a solid pace that was the fastest since last September. Surveyed companies commented on the replacement of leavers and efforts to boost capacity.  

Private sector companies in Yorkshire & Humber registered a second straight monthly decline in the volume of outstanding business at the beginning of the second quarter. According to surveyed firms, subdued demand and increased capacity supported the catch-up on unfilled orders.

Private sector businesses in Yorkshire & Humber were faced with another steep monthly rise in their operating costs during April. Salary expenses were noted as a key source of inflation by survey respondents. That said, the rate at which overall input prices increased was the slowest in just over two years, with downward pressures reportedly coming from raw material costs. 

Prices charged for goods and services by private sector firms in Yorkshire & Humber continued to increase at the start of the second quarter. Output prices were reportedly lifted to offset the impact of rising costs. The rate of inflation was steep and accelerated slightly from March’s 25-month low. Wales was the only monitored part of the UK to record a faster increase in charges than Yorkshire & Humber.