Yorkshire & Humber activity growth continues to lag behind UK average

Survey responses are collected in the second half of each month and indicate the direction of change compared to

the previous month. A reading of 50.0 indicates no change.

The index once again recorded above its crucial 50.0 no-change mark in March, signalling back-to-back monthly expansions in private sector business activity across Yorkshire & Humber.

However, at 50.7, this was down from the reading of 52.6 in February, signalling a slowdown in growth.

It also compared with 52.2 for the UK as a whole, with the region ranking as one of the weakest-performing at the end of the first quarter.

Compared to the other 11 monitored parts of the UK, Yorkshire & Humber firms recorded the weakest rise in new business and lagged behind the national average by a notable margin.

Malcolm Buchanan, chair of the NatWest North Regional Board, said: "A sustained upturn in private sector output in March is good news, rounding off a positive opening quarter of the year despite January's decline.

"However, activity and new order growth across the region lagged behind that seen across the UK as a whole in March, with Yorkshire & Humber firms ranking among the bottom performers on both counts.

"Encouragingly, a strengthening of business confidence to a ten-month high suggests that companies are looking beyond March's slowdown and are optimistic of growth in the coming year."

The index also shows that private sector companies in Yorkshire & Humber were strongly optimistic towards the 12-month outlook for business activity in March.

The level of confidence also improved, rising to its highest in almost a year. New product launches, increased demand and expansion plans were reasons given by companies that were upbeat on their prospects.

Private sector staffing levels across Yorkshire & Humber were broadly unchanged during the latest survey period, as evidenced by the respective seasonally adjusted index recording close to the 50.0 no-change mark.

While some companies expanded their workforce numbers to boost capacity and accommodate higher sales, others opted to not replace voluntary leavers.

Private sector companies across the region continued to observe rapid increases in their operating costs during March. According to the Index’s respondents, higher expenses relating to transport were seen, although others remarked on general price increases for a variety of items and services.

The rate of inflation, however, eased to a 25-month low during March, partly reflecting a drop in the price of certain raw materials.

Following the trend seen in input costs, private sector companies across Yorkshire & Humber raised their selling charges sharply, but to the weakest extent in just over two years during March.

In many cases, higher output prices reflected efforts to pass on greater cost burdens to clients.