Jobs growth provided a boost for Yorkshire's economy last month

The firms surveyed said hiring and restocking efforts had supported the latest increase in business activity.

Rising from May’s 15-month low of 52.1 to 54.2 at the end of the second quarter, the headline 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 – was consistent with a “marked rate of expansion”, the survey said.

A spokesman said: “Growth of new work intakes at Yorkshire and Humber companies softened for the fourth month running in June, reaching its joint-weakest in the current 17-month sequence of expansion and being only fractional overall.

“Where new business rose, survey participants reported greater market shares and stronger demand for some goods and services. Anecdotal evidence indicated that price pressures and subdued consumer confidence restricted the upturn.

“Amid reports of capacity expansion efforts, forecasts of better demand conditions and the replacement of lost staff, private sector firms in Yorkshire and Humber continued to hire extra workers during June. Moreover, the overall rate of job creation was sharp and quickened from May.”

Around twice as many companies reported higher payroll numbers (23%) as those that signalled a reduction (12%). The local trend for employment was the second-best of all 12 UK regions, behind London.

The spokesman said: “There was another substantial increase in prices charged for goods and services across Yorkshire and Humber, as companies reportedly shared part of their additional cost burdens with clients.

“Although private sector companies in Yorkshire and Humber continued to report higher volumes of outstanding business in June, the rate of accumulation eased to the slowest in the current 16-month sequence of expansion. Yorkshire firms remained optimistic that output would increase over the course of the coming 12 months, with around 62% of panellists forecasting expansion and 13% predicting a contraction. However, the overall level of sentiment fell to its lowest mark in one-and-a-half years, as some companies were concerned that inflationary pressures would restrict market demand and trigger a recession.”

Richard Topliss, Chair of NatWest North Regional Board, commented: “The Yorkshire and Humber economy managed to keep its head above water in June, posting a recovery in output growth as firms sought to work through their pending workloads and rebuild their inventories — supported by robust hiring activity. When it comes to the demand side, the picture was more concerning as another steep rise in selling prices almost brought growth to a halt.

“There was only a fractional upturn in new business, the weakest since February 2021, as consumers reassessed their spending budgets due to the cost-of-living crisis. There were softer increases in both input costs and output charges, but these were nevertheless among the strongest in their respective series histories.”