Output expands sharply amid sustained rise in new business

The latest Lloyds Bank Yorkshire & Humber PMI® data signalled continued improvement in private sector business conditions in the region.

Business activity and new orders remained in strong growth territory, despite easing slightly from the previous month.

As a result of sustained new business growth, staff numbers rose at an accelerated pace, which was the highest in three months.

Cost burdens rose for private sector companies in Yorkshire & Humber, albeit at a modest pace.  Similarly, selling prices continued to rise, although at a slower rate than in August.

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 59.1 in September, signalling sustained growth for private sector companies in the region.

Although easing slightly from the previous month, the rate of growth was solid and higher than the long-run series average (53.5).  

New orders continued to rise at a sharp pace in September, with 39 per cent of firms noting a rise in new business in comparison to the previous month.

Anecdotal evidence attributed this to strengthened client demand and a rise in new contracts.

Payroll numbers rose at an accelerated pace in among Yorkshire & Humber companies.

Furthermore, the latest rise was the fastest recorded in three months, with both service providers and manufacturers signalling higher staffing levels.

Backlogs of work increased at a moderate rate in September, with one-quarter of panellists commenting on higher volumes of outstanding business in comparison to the previous month. Sector data suggested that the overall rise was largely centred on the service sector.

Amid reports of higher commodity costs, average input prices rose for the twenty-fifth successive month in September, but the rate of inflation was only marginal.

As part of efforts to pass on increased cost burdens to clients, selling prices were raised in September.

The rate of charge inflation, however, eased from the previous month.

Commenting on the Lloyds Bank Yorkshire & Humber PMI survey, Leigh Taylor, area director for SME Banking in the North East, Lloyds Bank Commercial Banking, said: “The private sector in Yorkshire and Humber continued to expand at an impressive rate in September, with business activity rising strongly amid a sustained rise in new orders.

“The pace of business activity growth was also above the UK average for the second month in a row. Alongside sustained new business growth, staff numbers also rose at an accelerated pace in September to the fastest rate in three months, with both service providers and manufacturers reporting higher staffing levels.”

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