Output in the Yorkshire & Humber private sector rose markedly in May, with the rate of growth the sharpest for 26 months.
This was signalled by the headline Lloyds TSB Yorkshire & Humber Business Activity Index – a seasonally adjusted index that measures the combined output of the region’s manufacturing and service sectors – rising for the third month running to 57.6 (April: 55.7), the highest level among the 12 UK regions.
Both manufacturing production and services activity increased from April, with the stronger rise reported for the latter.
One-in-three firms reported higher activity levels in May, often linking this to larger volumes of new work. Overall, new orders rose markedly since April and at the fastest pace since March 2011. Moreover, the latest expansion in new business was stronger than the UK average.
Despite marked growth of both output and new orders, firms reduced their workforces in May. Job losses have been reported for four consecutive months, although the latest reduction in staff numbers was only marginal and the slowest in that sequence. By sector, employment fell in manufacturing, whereas it increased in services.
Meanwhile, outstanding business at private sector companies was largely unchanged in May. The majority of surveyed respondents (almost 60 per cent) reported no change in the level of backlogs of work since April.
Input costs rose further in the latest survey period, with a number of panellists mentioning higher energy prices and larger salary bills. That said, the rate of input price inflation was only modest and the weakest in nine months.
Firms passed on greater cost burdens to clients by raising their output charges in May. Although average selling prices rose modestly since April, it was nonetheless the first increase in four months and greater than that registered for the UK as a whole.
Commenting on the Lloyds TSB Yorkshire & Humber PMI survey, Martyn Kendrick, area director for Lloyds TSB Commercial Banking in Yorkshire, said:
“Yorkshire & Humber’s private sector went from strength to strength in May, as highlighted by marked growth of both new business and overall business activity. The latest expansions were not only the strongest for over two years, but the fastest of all the 12 UK regions in the survey.
“Ongoing weakness in the labour market was the main disappointment in this month’s survey, although employment only fell marginally in May and at a slower rate than the 20-month peak recorded in April.”