Employment in Yorkshire & Humber increased at the fastest rate since June 2015 during February, according to the latest Lloyds Bank Regional Purchasing Managers’ Index (PMI) survey.
The rate of job creation in the region was steeper than the UK average for the fifth consecutive month, with business activity growth also outpacing the country as a whole for the third month running during February.
The Yorkshire & Humber PMI registered at 55.3, signalling a strong pace of business activity growth, albeit a dip from 57.2 in January. A reading above 50 signifies growth, whereas a reading below 50 signifies contraction.
Firms reported higher export sales stemming from the weakness of sterling, however this also resulted in continued sharp rises in businesses’ input costs, the fastest in nearly six years.
The high cost pressures led to an increase in the average prices charged for goods and services, with the rate of inflation reaching the highest since mid-2008.
Despite the continued increase in costs, Yorkshire was the second most optimistic region in the UK, with more firms expecting higher output in 12 months’ time than the UK average.
The Lloyds Bank Regional PMI is the leading economic health-check of UK regions. It’s based on responses from manufacturers and services businesses about the amount of goods and services produced during February compared with a month earlier.
Leigh Taylor, regional director for Yorkshire SME banking at Lloyds Bank Commercial Banking, said: “The rise in employment during February is testament to the resilience of Yorkshire firms, which are remaining optimistic at times of increasing cost pressures and economic uncertainty.
“The continued growth in output is also encouraging to see, however cost pressures have led to some of the highest inflation levels in nearly a decade, with firms raising prices faster than the UK average.
“To navigate the higher costs while staying on top of cashflow, firms should consider all financing options available, and look for weak spots in their cash collection cycles to improve working capital.”
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