Region's economy will grow, says IoD leader

Margaret Wood also said that Yorkshire was reaping the benefit of years of public sector investment, as new figures showed the strongest monthly rise in business output here for more than a decade.

Mrs Wood, regional chair of the IoD, said the Yorkshire economy would expand, but "slowly", over the next year, boosted by the energy sector and the growing carbon capture industry.

"Business will change. There is a recognition here that we have the skills and the heritage."

She was speaking as the Yorkshire and Humber purchasing managers' index (PMI) posted a stronger rate of growth in April than for any month since January 2000.

Mrs Wood said employment was "coming back" and said it was as a result of the investment seen on new jobs and skills, such as the green sector, from regional development agency Yorkshire Forward, which helped businesses to survive despite the uncertain political and economic backdrop.

"We have to keep going, we cannot stop. In Yorkshire we have seen that investment over the long term and we are seeing a return on that now."

Tourism, boosted by the weak pound, and campaigning by Welcome to Yorkshire to highlight the region's attractions, was also having an impact, she said.

Yorkshire's PMI was in contrast to the softer growth seen across the UK as a whole as Yorkshire's output was the the third-fastest growth of the 12 UK areas. The business activity index, which is seasonally adjusted, reached 58.8 in April, up from 56.5 in March, the 11th consecutive month it has gone up. Private sector employment also rose for the first time in two years.

Markit, which compiles the data, also said there had been a marked rise in new business with the rate of expansion the second-fastest in six years and greater than the UK average.

Trevor Balchin, senior economist at Markit, said: "Yorkshire and Humber bucked the national trend of slowing growth in April. Private sector output rose at the fastest pace for a decade, reflecting a strengthening rebound from the extreme low of last year.

"The other key positive finding was a first rise in employment in the region for two years, and a sharper rate of job creation than the UK trend. A key factor boosting the region's growth relative to other parts of the UK in April was a strong performance from the service sector."

The creation of jobs was linked to rising workloads and was seen more in manufacturing than services. Workforces in this region expanded slightly faster than the national average and there was a rise in outstanding work for the first time in more than two years.

Inflationary pressures were also seen, however. Firms' average input prices rose at the fastest rate in 19 months and input cost inflation was much sharper than the national average, with managers saying this was because of rising fuel and raw material prices, particularly of metals and chemicals.

This had a knock-on effect of pushing up prices as firms passed on some, but not all, of the impact of higher input costs.

Competitive pressures meant the service sector saw price cuts.

INDEX SHOWS REBOUND IN ACTIVITY

The English regions saw business activity rebound in April, according to the Markit purchasing managers' index (PMI).

There was a rise in employment across England for the first time since August 2007. While firms became more confident about job hiring, there were still difficulties in passing on higher costs to clients. Input price inflation moved to its highest since late 2008 but not all of this was passed on to final prices.

Most regions saw a slowdown in the pace of output expansion, although above its long-run trend, and London saw the most pronounced slowing of growth.