The Yorkshire and Humber has returned to growth after three months of decline in an influential business survey.
The NatWest Yorkshire & Humber PMI Business Activity Index, which measures month-on-month change in the region’s manufacturing and service sectors, posted back above the 50.0 no-change mark in May, rising to 50.5 in May and showing expansion in the region’s private sector. The growth was the lowest of the 12 regions and nations of the UK covered by the report, however.
Business surveyed pointed to new orders after a year-long sequence of decline, with companies saying they were seeing improved market confidence. That led to a number of firms taking on additional staff in May, with the increase in employment slightly above the UK average.
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The rate of input cost inflation slowed during May and was at a seven-month low, the survey found, with companies highlighting higher wages and rises in prices for raw materials such as aluminium.
Malcolm Buchanan, chair of the NatWest North regional board, said: “The latest PMI data for the Yorkshire & Humber region make for encouraging reading, with local firms seeing renewed increases in output, new orders and employment during the month.
“The hope will be that the recent soft patch is behind us and that growth can start to solidify and speed up over the coming months. One other development of note was that selling prices increased at the slowest pace in approaching four years, potentially providing a further boost to demand conditions.”
At the end of last week, business group the CBI said that Britain’s economy would see faster-than-expected growth this year and next as the outlook brightens after a tough 2023.
The organisation has upped its forecasts for UK growth to 1% in 2024 and 1.9% in 2025 thanks to an expected pick-up in consumer spending as inflation falls back and wages remain robust.
There was also a positive forecast from the British Chambers of Commerce, which revised upwards its forecasts for growth for 2024 and 2025 to 0.8% and 1.0% respectively, though it warned that a poor outlook for exports was acting as a “drag anchor” and high interest rates continue to limit investment.
