Creation of jobs by region’s businesses fastest for year

Lloyds TSB Yorkshire and Humber Purchasing Managers’ Index (PMI) data indicated a further rise in business activity at the start of 2012. Output increased for the fifth consecutive month during January, with the rate of growth strong overall, it showed.

Firms generally linked higher activity to larger new business volumes. Concurrently, private sector employment rose at the strongest pace in 12 months, while the rate of input price inflation was only marginal during January.

Martyn Kendrick, area director for Lloyds TSB Commercial in Yorkshire, said: “January’s PMI data suggested that Yorkshire and Humber started 2012 with relatively strong momentum, driven by sustained output and new business growth.

“Encouragingly, job creation strengthened during the month, reaching the third-fastest rate in the 15-year history of the PMI survey. Overall expansion in Yorkshire and Humber was predominantly led by the service sector, as manufacturing growth remained much slower than the peak seen at the start of 2011.”

Yorkshire and Humber private sector firms recorded an increase in activity during January, as has been the case since last September.

This was signalled by the headline Lloyds TSB Yorkshire and Humber Business Activity Index, which measures the combined output of the region’s manufacturing and service sectors, posting above the 50.0 no-change mark in January.

At 55.7, the latest reading indicated the output increased strongly, with panellists in both the manufacturing and service sectors reporting higher activity levels. However, with the index down from 57.2, the rate of output growth slowed since December and was fractionally weaker than that recorded across the UK overall.

Incoming new business increased for the second consecutive month in January, but the latest rise was modest and weaker than the UK average. Overall, service providers reported an increase in new business, while manufacturers recorded lower new work intakes.

Surveyed companies that hired additional staff in Yorkshire and Humber commented on greater output requirements. In contrast to the reduction reported in December, input prices increased in January.

Higher costs for fuel and labour were particularly mentioned bt survey respondents. However, the rate of input price inflation was only marginal and the second-slowest across the 12 monitored UK regions.

Meanwhile, average selling prices fell during January. Where lower charges were reported, firms commented on strong competitive pressures. Output prices fell modestly in January, with the rate of decrease the fastest since last October.