Business activity grew at its quickest pace for six months in January amid suggestions price pressures could be easing.
The latest NatWest business survey for the East Midlands suggested what it called “a sharp expansion” in business activity across the region’s private sector.
The bank said the upturn was reportedly due to stronger client demand and efforts to clear backlogs of work – and was the second fastest regional rise behind London.
A NatWest spokeswoman said: “The rise in new orders was the fastest for seven months and the second-quickest of the 12 monitored UK regions.
“Anecdotal evidence suggested the expansion was due to a recovery in client demand following a drop in Covid-19 cases as January progressed.”
The bank said January data also signalled an improvement in expectations for the year ahead across the East Midlands, with business confidence “strong overall”.
The positive sentiment reportedly stemmed from hopes of a further recovery in demand and a reduction in the impact of any future Covid-19 variants.
Firms in the East Midlands also recorded a marked uptick in job creation in January, as the pace of employment growth accelerated.
The local rate of increase in workforce numbers was also the quickest of the 12 monitored UK regions.
However the January data signalled another substantial increase in input prices, attributed to greater energy, raw material and labour bills.
Business did suggest the rate of inflation had softened, however, and was the slowest for three months. The pace of increase was still quicker than the UK average.
As a result the rise in the cost of finished products was broadly in line with that seen since last October, but did ease slightly.
John Maude, who sits on the NatWest Midlands and East regional board, said: “January data signalled renewed growth momentum at the start of 2022, as output and new orders rose at a faster pace.
“The sharp expansions in activity and client demand supported an accelerated rise in workforce numbers.
“Despite the rate of job creation quickening to reach a series record, supply chain disruption and staff illness due to Covid-19 hampered efforts to clear backlogs of work which grew at a strong pace.
“Optimism regarding the outlook for output over the coming year also ticked higher amid hopes that the impact of Covid-19 variants will be reduced going forward.
"At the same time, price pressures eased in January. Although still substantial, increases in input costs and output charges moderated."
