Seven-month high for activity in region
Index shows firms’ growing optimism
Business activity in Yorkshire hit a seven month high in March as demand improved with firms looking forward to the relaxation of restrictions put in place to tackle the coronavirus pandemic.
The NatWest Yorkshire & Humber Business Activity Index, registered 60.2 in March, up from 51.8 in February.
BUSINESS ACTIVITY in Yorkshire hit a seven month high in March as demand improved with firms looking forward to the relaxation of restrictions put in place to tackle the coronavirus pandemic.
The NatWest Yorkshire & Humber Business Activity Index, a seasonally adjusted index that measures the month-on-month change in the combined output of the region’s manufacturing and service sectors, registered 60.2 in March, up from 51.8 in February.
It pointed to the quickest expansion in business activity in Yorkshire since last August.
Private sector firms in Yorkshire reported a marked increase in new business during March with the rate of growth strongest for almost seven-and-a-half years.
Anecdotal evidence suggested that demand was building due to vaccine rollouts and the expected relaxation of Covid-19 restrictions.
The rise in new work was the quickest across any of the 12 monitored UK regions.
Following record confidence levels in Yorkshire during February, there was little-change in expectations towards the 12-month business outlook in March.
Over 77 per cent of panellists anticipate a rise in output over the coming year, while less than four per cent forecast a contraction. In line with the trend for new business, optimism was the strongest across any of the 12 covered UK regions.
Firms often mentioned expectations for a release of pent-up demand as restrictions related to the pandemic are gradually relaxed.
March data pointed to a marked increase in hiring across the Yorkshire private sector, with employment rising at the quickest pace since November 2017.
Both covered sub-sectors reported higher staff numbers, although the increase was sharper at service providers. The overall rate of job creation outpaced any of the other 11 regions of the UK.
Richard Topliss, chairman of NatWest North regional board, said: “Latest PMI data suggested that the recovery in economic conditions across Yorkshire gathered pace in March.
“The region topped the UK rankings for new business growth, job creation and expectations on future activity, as firms prepared for a release of pent-up demand that has been building amid Covid-19 restrictions.”
Work outstanding at Yorkshire businesses increased for the first time in three months during March. The rate of accumulation was the fastest since the end of 2017.
Cost burdens faced by Yorkshire firms continued to increase markedly at the end of the first quarter. The rate of inflation accelerated to the quickest since September 2017. When explaining higher input prices, some panellists mentioned raw material shortages and higher freight costs. Input prices also rose sharply at the national level.
Mr Topliss said: “The one worry was a further acceleration in input cost inflation, as global raw material shortages drove prices higher. However, six of the other 11 monitored regions of the UK saw sharper increases than in Yorkshire. Looking forward, March’s surge in new orders should feed through into further rises in activity, and with sentiment staying close to record highs, there is every chance the upward momentum can continue well into the summer.”