Sectors in Yorkshire showing economic resilience

Patrick Bowes, the chief economist at regional development agency Yorkshire Forward, said more companies were creating jobs, but the "64 million dollar question" was the extent to which this trend would be maintained in 2011.

The Yorkshire and Humber PMI survey reported weaker growth in the regional economy for the second consecutive month. Business activity and new orders fell to eight and seven-month lows respectively. However, Yorkshire and the Humber continued to outperform the UK average.

The North West posted the fastest rate of output growth in September, followed closely by the North East and Yorkshire and the Humber.

The survey echoed the findings of a study conducted by the region's chambers of commerce which found that Yorkshire's economic recovery had continued over the past three months, but at a slower rate.

In Yorkshire, PMI survey respondents attributed the rise in business activity to increased orders and, in some cases, re-stocking by clients.

The regional PMI survey, which is sponsored by England's regional development agencies, is based on responses sent to more than 1,200 manufacturing and service sector companies.

The headline Business Activity Index – which measures the combined output of the region's manufacturing and service sectors – fell from 54.9 in August to 54.4.

Tough economic conditions and the prospect of Government spending cuts led to slower growth in new orders, but the Yorkshire figure remained above the national average.

Private sector firms hired more staff in September to cope with increased business activity and sales.

The rate of employment growth in Yorkshire and the Humber was also stronger than the UK average.

Mr Bowes said firms were using more of their capacity, particularly in manufacturing, which was helping to create jobs.

He continued: "The key challenge to the regional jobs market is in 2011 with the prospect – given our current very discrete estimate of employment growth next year – that employment growth could remain negative for a fourth straight year.

"On balance, employer hiring intentions in Yorkshire into the fourth quarter remain positive and more robust than in most English regions.. this backdrop is incredibly important to the region's manufacturing sector and key service sectors and will help sustain export demand as domestic consumption slows in the first quarter of 2011."

Margaret Wood, the regional chairman of the Institute of Directors, said confidence was slowly returning, adding: "Yorkshire has managed to stay ahead of the national rates of expansion as a result of our long-term investment into growth."

Gary Lumby, the head of retail and small business banking at Yorkshire Bank, who is also president of Leeds Chamber of Commerce, said there had been a pick up in demand for credit as companies started to re-stock and spent more money on marketing.

Mr Lumby said the private sector was mainly "fit for purpose" and predicted there would be a prudent approach to business spending next year.

Growing in confidence

Many Yorkshire businesses are growing and feeling confident about their prospects, according to the latest Yorkshire & Humber Chambers of Commerce Quarterly Economic Survey.

However, the survey, which is based on responses from 495 businesses, showed that key indicators such as sales, orders and cashflow had weakened slightly since the "very strong" growth recor-ded in the previous quarter.

Nick Pontone, the director of policy for Yorkshire & Humber Chambers of Commerce, said: "The number of firms recruiting continues to rise and investment levels are creeping up.

"The evidence still points to a bumpy private sector recovery and Yorkshire and Humber is faring well compared to other parts of the UK."