Strong new order growth supports fastest rise in output since August 2012

Output in Yorkshire & Humber’s private sector grew at the strongest rate in seven months during March.

The Lloyds TSB Yorkshire & Humber Business Activity Index rose to 53.3 from 51.3 in February.

The index has indicated growth for five consecutive months, with the latest reading consistent with a solid expansion. Sector data meanwhile suggested that the latest increase in output reflected higher levels of services activity, as manufacturing production was broadly the same as one month previously.

The increase in private sector output generally reflected larger volumes of new business, which companies in turn attributed to new contract wins and greater client demand. New order growth was the strongest for almost two years in March, and the second-fastest among the nine English regions.

Firms continued to report lower levels of work-in-hand (but not yet completed) in the latest survey period. The latest depletion of outstanding business was solid and faster than that recorded one month previously.

Despite higher new order volumes, private sector firms reduced their workforces for the second month running in March. The rate of job losses was moderate and in contrast with a fractional rise in employment across the UK as a whole. However, the decline was largely confined to manufacturing, as service providers hired additional staff in March.

Input prices continued to rise in March, with panellists commonly reporting increased costs for fuel and salaries. Overall, the rate of inflation was the strongest in five months, but weaker than the long-run series average.

Output charges meanwhile fell for the second consecutive month, albeit only marginally. Firms that reduced their selling prices attributed this to stronger competitive pressures. Overall, Yorkshire & Humber was the only English region to record lower average tariffs in the latest survey period.

Commenting on the Lloyds TSB Yorkshire & Humber PMI survey, Martyn Kendrick, area director for Lloyds TSB Commercial Banking in Yorkshire, said:

Having reached a low point in February, Yorkshire & Humber’s private sector growth gained momentum in March, recording the greatest expansion seen since last August. Looking at the first quarter as a whole, the rate of growth was the fastest since early 2012 and was also the quickest of all nine English regions.

The increase in output can largely be attributed to improvements in the service sector. Manufacturing acted as a drag on the region’s economy, and the sector was also the main cause for an overall reduction in employment numbers during March.

Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.