Private sector activity in the Yorkshire & Humber region increased at the fastest pace since August 2014 in March.
This was supported by a further rise in new orders and employment growth. Meanwhile, input prices declined at a moderate pace, while output charges rose for the fourth month running.
At 59.5 in March, the seasonally adjusted Lloyds Bank Yorkshire & Humber Business Activity Index posted its highest reading in seven months. Furthermore, the latest figure pointed to faster growth than the UK average for the second month running.
According to panellists, new client gains and a stronger customer base led to an expansion in output. Higher business activity reflected faster expansions in both the manufacturing and service sectors.
A rise in activity was underpinned by a further increase in new orders at Yorkshire & Humber private companies. Furthermore, the rate of expansion was the fastest since November 2014 and broadly in line with the UK-wide trend.
Reports of new project launches and enhanced marketing strategies were cited as some of the reasons behind the increase.
In line with further expansions in both activity and new orders, private sector firms in the Yorkshire & Humber region hired additional staff in March.
In fact, employment levels rose at the quickest pace in the series history. This was reflective of marked rises in both the manufacturing and service sectors.
Despite a rise in workforce numbers, volumes of unfinished work accumulated in March. Although only moderate, the rate of increase in backlogs was fastest since January 2014.
Downward cost pressures were evident at private sector firms, as input prices declined, reversing the trend observed in the previous month. Reports of lower imported raw material costs stemming from the deprecation of the euro against the pound led to a reduction in purchasing costs.
Meanwhile, charges increased for the fourth month in a row. According to anecdotal evidence, panellists raised their charges in order to improve profit margins.
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: “Private sector business activity growth in Yorkshire & Humber in March accelerated to the fastest rate since August 2014.
“A rise in activity was supported by a marked increase in new orders, with firms linking greater sales growth to the launching of new projects and improved marketing strategies.
“This led to employment levels rising sharply and at the fastest rate recorded. On the price front, input costs declined as reports of a favourable pound/euro exchange rate led to a reduction in imported raw material prices.
“Meanwhile, prices charged increased for the fourth month running as private sector firms across the region attempted to improve profit margins amid strong demand.”