Strong business growth in region as workforces cut

However, employment in the region’s private sector fell for the third month running, with the rate of job losses the strongest since August 2011, indicated data from the Lloyds TSB Yorkshire and Humber purchasing managers’ index (PMI).

Martyn Kendrick, area director for Lloyds TSB Commercial Banking in Yorkshire, said: “Yorkshire & Humber’s private sector picked up in April, with the rate of business activity growth the strongest since January 2012.

“The latest increase in activity partly reflected a strong rise in new business, and was the second-strongest among the 12 UK regions behind Wales. Despite this, it is disappointing that the increases in activity and new business have not yet translated into renewed job creation, with firms on the whole reporting job losses for the third month running.”

Business activity in the Yorkshire and Humber’s private sector rose for the sixth consecutive month in April. This was signalled by the headline Lloyds TSB Yorkshire and Humber Business Activity Index – a seasonally adjusted index that measures the combined output of the region’s manufacturing and service sectors – remaining above the 50.0 no-change mark.

At 55.7, up from 53.3 in March, the index was the highest among all nine English regions and consistent with a strong rate of growth.

Firms linked the increase in activity to greater client demand and new contract wins. Concurrently, the volume of new business received by private sector companies rose strongly in April, although at a slightly weaker pace than March’s near two-year peak.

The level of work-in-hand at monitored companies meanwhile fell for the twelfth consecutive month in April. However, the latest depletion of outstanding business was modest and the weakest in the current sequence.

Despite the increases in both output and new business, firms reduced their workforces in April. Employment in Yorkshire and Humber’s private sector has fallen for three straight months, with the latest reduction the sharpest since August 2011. Job losses were evident in both the manufacturing and service sectors.

Input costs continued to rise in April, with panellists commonly reporting higher prices for fuel and raw materials.

A number of respondents also commented that unfavourable exchange rates contributed to the increase in costs.

Overall, the rate of input price inflation was solid, but weaker than the UK average.

Meanwhile, output charges fell for the third month running, albeit marginally. Lower selling prices were recorded in both the manufacturing and service sectors, with the overall reduction the strongest among all 12 UK regions.