Business activity remains strong but growth has slowed in Yorkshire and the Humber, latest analysis has revealed.
The NatWest PMI Business Activity Index saw the month-on-month change in output slip to a seven month low in April, but it remains well above the status quo level.
Momentum from the lifting of pandemic restrictions appears to be fading, with sharp price hikes also picked up.
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The headline figure slipped from 64.3 in March to 58.2 in April, showing robust growth remains - at pace with the UK as a whole at the start of the second quarter.
Richard Topliss, chair of NatWest North Regional Board, said: “Despite the sizeable drop in the survey’s headline output measure, it remained well above the crucial 50.0 threshold and thereby indicated another sharp expansion in business activity across Yorkshire and the Humber during April. Overall, the loss of growth momentum is unsurprising as the boost from the removal of Covid-19 restrictions peters out.
“That said, the risks to growth continue to build. New order growth slowed to a seven-month low in April, with some survey respondents attributing weakness to higher prices charged. Indeed, output price inflation accelerated to a fresh record as businesses continue to see pass on soaring costs.
“The level of optimism also fell in April, slumping to its lowest since December 2020
as some panel members grew concerned about the economic outlook. Indeed, uncertainties for businesses are notable, such as the war in Ukraine, lingering pandemic-related risks such as disruptions similar to those we’ve seen in China, and inflation.”
Expansions had been among the sharpest on record in both February and March.
At the sector level, services providers remained more upbeat than their manufacturing counterparts.
Employment continued to increase at a sharp pace that was well in excess of the survey average in April. Of the 12 monitored UK regions, only London posted a faster upturn.
Where jobs growth was reported, this was attributed to expansion efforts.
Outstanding business also increased, signalling an additional strain on operating capacities across Yorkshire and the Humber. Input delivery delays and staff shortages were linked to the increase in backlogs. That said, the increase in unfinished orders was only mild and the slowest since last December.
The fastest increase in operating costs since last November was recorded in April too. Rising energy, fuel and raw material prices were often cited as a cause of steep inflation by panellists. Overall, the increase in operating costs across the region was broadly level with that seen for the UK as a whole.
Prices set for goods and services rose at the strongest rate since the statistics were first collated in November 1999 during April. Only Northern Ireland outpaced the growth.
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