Yorkshire companies boosted by surge in new orders

The index for October showed business activity growth remains sharp, but eased slightly from September.

It revealed the fifth successive month of job creation, adding to hopes that the economic recovery is gaining ground.

However, higher input prices are fuelling inflation as firms passed on rising costs to their customers.

The combined output of the region’s manufacturing and service sectors fell slightly from 59.8 in September to 59.0 in October. A reading of 50 or above indicates growth.

New orders posted the highest reading in almost 17 years of data collection.

Anecdotal evidence suggested that fuller order books were in part a result of improvements in the wider domestic economy.

A number of respondents reported stronger demand from clients in the construction sector and rising housing market-related spending.

Employment in Yorkshire rose again, though the pace of growth failed to match the UK average.

Firms cited improving business conditions and strong turnover growth as the key drivers behind the latest increase in payroll numbers.

Martyn Kendrick, a director at survey sponsor Lloyds Bank in Yorkshire, said: “The sharp improvements recorded in Yorkshire over the last few months continued into October, although the rate of growth in business activity eased slightly from the highs seen over the summer.

“Nonetheless, the region’s private sector saw a record expansion in new orders, and employment continued to grow at a solid rate.

“New order growth should translate into increased activity in the coming months and further boost job creation.”

Meanwhile, optimism among small and medium-sized manufacturers is growing at the fastest pace since records began in 1988, according to the Confederation of British Industry.

Total new orders increased in the three months to October for the first time since July 2012, driven by domestic orders which rose at their fastest rate since January 1995.

Export orders rose at their fastest rate since April 2011, while optimism around export prospects for the next 12 months increased strongly, according to the business lobby group.