Output rise in Yorkshire and Humber - report

The Yorkshire & Humber PMI said the private sector economy grew, with both activity and new business rising – and at stronger rates.

Employment levels were, however, cut at an accelerated rate, it said.

The headline Business Activity Index – which measures the combined output of the region's manufacturing and service sectors – registered 55.8 in December. That was up from 55.4 in November and signalled the sharpest rate of growth for four months.

The seventh successive monthly increase of business activity was largely underpinned by higher sales in the latest survey period, Markit said. Higher activity and sales were largely centred on the manufacturing economy at the end of 2009.

Staffing levels in Yorkshire and Humber's private sector declined for the 20th consecutive month. The pace at which employment fell was the steepest since September. However, sector data indicated that job cuts were largely confined to the service economy in December.

Although staffing levels were cut further, companies in the region were again able to make inroads into their work outstanding, albeit to a much lesser extent than in recent months.

Input price inflation hit a 14-month high at the end of 2009 as the price of raw materials continued to increase. Input costs have now risen for three months in a row.

Efforts to protect margins from higher operating costs led to a first rise in average output charges since October 2008. However, with market competition remaining strong, the rate of inflation was only slight.

Patrick Bowes, chief economist at Yorkshire Forward, said: "The news that private sector activity in Yorkshire and Humber continues to increase is especially positive, particularly in the context that such growth is reminiscent of pre recession rates of expansion.

"The more robust rise in new order volumes in manufacturing is especially welcome and will help address low capacity utilisation levels in the industry regionally."