BUSINESS activity in Yorkshire is going up .... but only just.
The Lloyds TSB Yorkshire & Humber Business Activity Index – which measures the combined output of the region’s manufacturing and service sectors – signalled a second monthly increase in business activity in Yorkshire and Humber’s private sector during December – up to 52.5 from 51.2 in November.
The rate of growth was modest and largely reflective of higher services output as manufacturing production fell marginally.
Firms generally attributed the overall expansion in activity to higher volumes of new orders and attempts to reduce backlogs of work. New business rose modestly and at the strongest pace since September.
Outstanding business at monitored companies fell for the eighth consecutive month in December. The latest depletion was the strongest since July, with a particularly sharp reduction reported in the manufacturing sector.
Private sector employment in Yorkshire rose further during the latest survey period.
Anecdotal evidence attributed job creation to higher new order requirements and the latest increase in head counts was the strongest since February and in contrast to a slight reduction across the UK.
Firms faced higher input costs in December, with fuel particularly mentioned as having increased in price.
Manufacturers and service providers both reported greater costs. The overall rate of inflation remained weaker than the long-run series average, despite having quickened since November.
However, output charges fell modestly over the month due to stronger competitive pressures. Although price discounting was evident at service providers, manufacturers raised their selling prices in December.
Commenting on the Lloyds TSB Yorkshire and Humber PMI survey, Martyn Kendrick, area director for Lloyds TSB Commercial in Yorkshire and Humber, said: “Although the rate of output growth increased in December, the modest rise was not enough to prevent a disappointing end to the year.
“In fact, the average PMI Business Activity Index reading for the fourth quarter of the year was the lowest since the second quarter of 2009. This suggests that the private sector economy across Yorkshire and Humber remains weak, but is showing tentative signs of improvement in 2013.
“The region also continued to out perform the UK average, with the increases in output, new orders and employment in contrast with the slowdown seen across the UK as a whole.”