Yorkshire and the Humber experienced the fastest expansion in business activity in the UK during July, with firms hiring staff at the quickest rate since March 2015, according to the latest Lloyds Bank Regional PMI report.
The Yorkshire & Humber business activity PMI registered 58.0 in July, up from June’s reading of 57.6 and ahead of the UK average of 54.1. A reading above 50 shows growth in output, whereas a reading below indicates decline.
Local businesses also experienced the fastest rise in new orders in the UK, which also stretched firms’ capacity as work backlogs increased.
Local employment growth was the second-quickest out of all monitored regions, with Yorkshire firms linking the increase to a rise in new orders.
Input costs continued to put pressure on firms, as the weak pound and shortages at suppliers inflated prices of raw materials. Increased cost burdens were partly passed on to clients through higher prices charged for goods and services.
Business confidence remained significantly above the UK average in July, but concerns surrounding economic uncertainty and Brexit reduced optimism to the lowest level of 2017 so far.
The Lloyds Bank Regional PMI, or Purchasing Managers’ Index, is the leading economic health-check of the UK regions. It’s based on responses from manufacturers and services businesses about the amount of goods and services produced during July compared with a month earlier.
Leigh Taylor, regional director for Yorkshire at Lloyds Bank Commercial Banking, said: “Out of all UK regions, Yorkshire topped the table for growth in both business activity and new orders, coming second for job creation too.
“There’s plenty of reason why the local economy should keep up this momentum, as opportunities for businesses stretch to every corner of the county.
“Huddersfield Town AFC’s promotion will no doubt provide economic benefits for the city, while the regeneration of Halifax Piece Hall will help boost tourism and leisure trade in West Yorkshire.
"More high profile manufacturers are also moving into South Yorkshire, while in the north-east, Hull continues to benefit from City of Culture status.
“To make sure local businesses get the most out of this period ripe with opportunity, firms need to streamline their working capital so they have the flexibility to create capacity when facing high demand.”
Karan Sejpal, regional head, North West and Yorkshire at UBS Wealth Management, commented: “While recent national PMI figures were encouraging, today’s regional data reveals a particularly strong performance in Yorkshire.
"July’s PMI figures follow a run of above-average performances in business activity, hiring and new orders by the region. With the national picture suggesting that manufacturing growth is outstripping that of services, Yorkshire business owners will be cheered to see momentum is building in our region for both sectors.”
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