How Yorkshire topped the regional growth rankings for business activity in February

The NatWest Yorkshire & Humber PMI 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, increased sharply to 63.1 in February, from 56.1 in January.

It signalled the fastest expansion in private sector business activity across Yorkshire for eight months.

The rate of growth was among the fastest on record and stronger than those seen across the other 11 monitored UK regions.

According to panellists, an increase in employment, which survey data showed rising at a survey-record pace in February, as well as recovering demand, supported greater activity levels.

Richard Topliss, chairman of the NatWest North regional board, said: “As the wave of Omicron infections faded, business activity growth across Yorkshire and Humber surged higher during February to an eight-month high.

“The region was the best performer across the 12 parts of the UK monitored by the survey and outpaced the UK average by a notable margin.”

New orders placed with private sector businesses in the region increased at the fastest rate in eight months during February.

Strong underlying demand conditions, in part reflecting rebounding activity at clients, was cited as a reason for improved sales performances.

In comparison to the other 11 monitored areas of the UK, only London recorded a faster upturn in new orders during February.

The Future Activity Index remained strongly above the neutral 50.0 mark and was much higher than its historical average in February, signalling a strong level of business confidence.

Only London-based businesses recorded a stronger degree of positivity of the 12 monitored UK areas.

Investment plans, new product offerings and positive forecasts regarding the economy supported growth expectations. However, the level of optimism dipped to a five-month low.

The seasonally adjusted Employment Index hit a high during February, signalling the fastest rate of jobs growth since data were first collected over 25 years ago.

Many firms strengthened their staffing numbers to support greater levels of activity, according to anecdotal evidence.

Yorkshire was also a top-performer when compared with the other regions, with employment growth outpacing the UK-wide average and being only surpassed by that seen for London.

Mr Topliss said: “Further signs of positivity were seen in survey data relating to jobs and demand.

“Employment growth accelerated to a survey high as businesses stepped up their efforts to expand, while new orders placed for goods and services rose at the fastest rate since last summer.

“However, inflationary pressures remained substantial. While raw material prices continued to rise, according to panellists, these were compounded by rising energy bills.

“We saw selling charge inflation remain unchanged from January, which was the fastest on record.”

Steep cost pressures

Latest survey data signalled another month of steep cost pressures faced by private sector firms in Yorkshire and Humber. Rising prices for raw materials and fuel were mentioned by panellists, as well as rising wage pressures and utility costs.

Overall, the rate of input cost inflation edged fractionally higher from January and was substantial, but remained below the all-time high seen last November.

Prices charged for goods and services in Yorkshire and Humber continued to rise during February, with the rate of increase matching January’s survey peak. Where charges were increased, this was attributed to greater costs.

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James Mitchinson