Activity up as orders weaken for region's manufacturers
By Hull Daily Mail | Posted: 8 Apr 2019
Business activity in the region increased solidly during March, despite demand conditions having weakened
New survey data showed a first reduction in new orders since July 2016, while employment gently rebounded from the decline registered in February. Business confidence also improved to a three-month high, though was subdued overall.
The headline NatWest Yorkshire & Humber Business Activity Index - a seasonally adjusted index that measures month-on-month changes in the combined output of the region’s manufacturing and service sectors - remained at 52 points in March, signalling a solid increase in business activity.
Moreover, it compared favourably with the UK-wide figure of 50 points which signalled no-change in national business activity from February.
Sector data indicated that growth in the region was mainly centred on manufacturing.
And while new orders fell back, the rate of contraction was marginal and softer than that seen at the UK level. Anecdotal evidence from panellists indicated that they had observed an overall weakening of demand conditions during March.
The extra staffing capacity created in March enabled businesses to work through their unfinished orders. The overall volume of incomplete business declined among Yorkshire & Humber firms for the sixth consecutive month and at the fastest pace in exactly five years.
Input price inflation remained strong and was slightly quicker than in February. Higher raw material costs - notably fuel - and a weaker pound were listed by panellists as factors behind greater cost burdens.
In contrast, output charge inflation eased from February to the slowest since June 2016. Nonetheless, the rate of inflation was solid and faster than that seen across the UK as a whole.
Yorkshire & Humber companies were optimistic that output would increase over the next year, with the level of positive sentiment rising to a three-month high in March. Investments in new equipment and expectations of higher sales growth were cited by panellists as reasons to be confident.