The headline Lloyds Bank Commercial Banking Yorkshire & Humber Business Activity Index – a seasonally adjusted index that measures the combined output of the region’s manufacturing and service sectors – fell slightly from 59.8 in September to 59.0 in October.
New orders saw an acceleration in the rate of growth as the seasonally adjusted index posted the highest reading in almost 17 years of data collection.
Anecdotal evidence suggested that fuller order books were in part a result of improvements in the wider domestic economy.
A number of respondents cited stronger demand from clients in the construction sector and rising housing market related spending.
Employment in Yorkshire & Humber rose for the fifth successive month in October, though the pace of growth failed to match the UK average.
Firms cited improving business conditions and strong turnover growth as the key drivers behind the latest increase in payroll numbers.
Growth in business outstanding slowed to a near stagnation during the latest survey period.
Anecdotal evidence indicated that staff recruitment had helped prevent a build-up of outstanding business in October.
Input price rose for a fourteenth successive month in October and the pace accelerated from September.
Yorkshire & Humber saw a sharper pace of cost inflation than across the UK as a whole. A number of panellists attributed increases to rising wages and higher fuel costs.
October marked a sixth consecutive month of output price inflation, though the pace slowed marginally from September.
Higher costs, in particular rising utility bills and prices for raw materials, were cited by firms as the primary reasons for increased output charges.
Commenting on the Lloyds Bank Commercial Banking Yorkshire & Humber PMI survey, Martyn Kendrick, area director SME Banking in Yorkshire and Humber, Lloyds Bank Commercial Banking, said:
“The sharp improvements recorded in Yorkshire & Humber over the last few months continued into October, though the rate of growth in business activity eased slightly from the highs seen over the summer.
“Nonetheless, the region’s private sector saw a record expansion in new orders, and employment continued to grow at a solid rate.
“New order growth should translate into increased activity in the coming months and further boost job creation.”