Business activity remained in expansion in April, with firms commenting that stronger demand and better economic conditions led to higher output. Alongside this, new orders remained in growth territory, leading to the fastest increase in payroll numbers since the series began in January 1997.
Input and output prices rose in April, although both rates of inflation were below the UK average.
The headline Lloyds Bank Yorkshire & Humber Business Activity Index – a seasonally adjusted index that measures the combined output of the region’s manufacturing and service sectors – registered at 56.4 in April, up from 55.8 reported in March.
Volumes of new orders expanded sharply again, which firms attributed to higher demand.
Some firms noted that successful monetary initiatives led to new business gains. That said, Yorkshire & Humber saw a weaker overall rise in new business than the UK as a whole.
Employment and backlogs
Payroll numbers rose in April for the eleventh month running. Continued growth in output and new orders again supported rising employment.
Firms also commented that staff hiring had been underpinned by the expectation of further solid growth in the Yorkshire & Humber economy. April saw employment growth remaining above the UK average.
Despite an increase in new orders, levels of unfinished work declined for the third month running.
The solid drop in backlogs suggested that firms were largely able to cope with the stronger demand.
Input prices continued to rise in April, although at the lowest rate seen since June 2013.
The service sector was the main driver of cost inflation as manufacturers observed a fall in input prices.
The passing on of higher cost burdens to clients in turn led to a moderate rise in selling prices in April.
That said, selling prices rose at the slowest rate in the current sequence of inflation, which began in May 2013.
Commenting on the Lloyds Bank Yorkshire & Humber PMI survey, Martyn Kendrick, area director SME Banking in Yorkshire, Lloyds Bank Commercial Banking, said:
“Output and new orders rose strongly in April, leading to the greatest rise in employment since the survey began in 1997.
“Firms across Yorkshire and Humber attributed the increase in employment to rising workloads and expectations of further growth in the region’s economy.
“Both selling prices and input costs rose, albeit at their weakest since last summer.”