Region’s activity surges despite global worries
Yorkshire enjoys strong start to Q2
YORKSHIRE EXPERIENCED a surge in business activity in April, despite an uncertain global economic outlook.
The headline NatWest Yorkshire & Humber PMI Business Activity Index, that measures the month-on-month change in the combined output of the region’s manufacturing and service sectors, slipped to a three-month low of 58.2 in April, down from 64.3 in March.
Nevertheless, the headline measure pointed to a sharp expansion in activity across Yorkshire at the start of the second quarter, with growth matching that seen for the UK as a whole.
Having signalled expansions that were among the sharpest on record in both February and March, the seasonally adjusted index slumped to a seven-month low in April. Nevertheless, it remained above the 50.0 no-change threshold and pointed to a solid improvement in demand for goods and services provided by private sector firms in Yorkshire.
Strong conditions in certain parts of the economy supported client appetite, although rising prices were reported by some companies as a drag on new order growth.
Latest survey data signalled a strong level of business confidence across Yorkshire during April. According to anecdotal evidence, investment plans and positive demand projections were cited as reasons to be optimistic.
That said, output expectations slid to their weakest since December 2020 as some respondents were concerned about the economic outlook.
At the sector level, services providers remained more upbeat than their manufacturing counterparts. The level of employment across the private sector in Yorkshire continued to increase at a sharp pace that was well in excess of the survey average in April.
Moreover, of the 12 monitored UK regions, only London posted a faster upturn.
Where jobs growth was reported, this was attributed to expansion efforts. That said, the increase in staffing numbers was the weakest since January.
The seasonally adjusted Outstanding Business Index posted above the 50.0 no-change mark in April to signal additional strain on operating capacities across Yorkshire.
Input delivery delays and staff shortages were linked to the increase in backlogs. That said, the increase in unfinished orders was only mild and the slowest since last December.
Private sector companies in Yorkshire & Humber recorded the fastest increase in operating costs since last November during the latest survey period. Rising energy, fuel and raw material prices were often cited as a cause of steep inflation by panellists.
Overall, the increase in operating costs across the region was broadly level with that seen for the UK as a whole.
Richard Topliss, chair of NatWest North Regional Board, said: “Despite the sizeable drop in the survey’s headline output measure, it remained well above the crucial 50.0 threshold and thereby indicated another sharp expansion in business activity across Yorkshire & Humber during April. Overall, the loss of growth momentum is unsurprising as the boost from the removal of Covid-19 restrictions peters out.
“That said, the risks to growth continue to build.”