Private sector activity growth slows to weakest since January

Latest data signalled a slowdown in business activity growth at private sector firms in the Yorkshire & Humber region. Incoming new orders increased at the weakest rate since January 2015 and one that was slower than the UK average.

Despite this, employment levels remained in solid growth territory. Meanwhile, amid the depreciation of the euro against the pound, both input and output prices declined in April.

The seasonally adjusted Lloyds Bank Yorkshire & Humber Business Activity Index posted at 56.7 in April, down from 59.5 in March, thereby signalling a slowdown in output growth.

Furthermore, the latest expansion was the weakest since January and was slower than the UK average for the first time in three survey periods. Slower Yorkshire & Humber activity growth reflected weaker expansions in output in both the manufacturing and service sectors.

Alongside a weaker increase in activity was a slowdown in new business growth at Yorkshire & Humber private sector companies. Moreover, the rate of growth was slower than the UK-wide average. That said, the latest increase was still strong in the context of historical data.

Private sector firms in the Yorkshire & Humber region hired additional staff in April. Although easing from March’s series record, the rate of expansion was faster than the UK average.

According to anecdotal evidence, panellists hired extra workers to strengthen core business capacities and in response to an expansion in activity, while some mentioned prospects of future output growth leading to greater staff numbers. 

Volumes of unfinished goods were depleted in April. However, the rate of decline was fractional and the slowest in three months.

Downward cost pressures were evident in the Yorkshire & Humber region, as input prices continued to fall. That said, the latest decline was only marginal.

Meanwhile, charges fell for the first time since November 2014. The favourable euro/pound exchange rate driving down raw material costs and intensified competition were cited as the principle factors behind lower selling prices.

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: “Business activity growth slowed down across Yorkshire & Humber in April. New business growth eased to the weakest since the start of 2015 and was slower than the UK average for the fifth straight month.

“However, private sector firms hired additional staff in April, and lower imported raw material costs and intensified competition led to the sharpest fall in prices charged since August 2012.”

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