April brought a stronger expansion of regional business activity after growth eased off in March, but the Yorkshire and Humber region is still lagging behind much of the UK.
The NatWest Yorkshire and Humber PMI Business Activity Index accelerated from March's 50.7 to 52.5 in a spluttering start to 2023 that has failed so far to see consecutive months build any real lasting momentum.
Only Wales and the East Midlands have registered weaker expansions in the manufacturing and services sectors.
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Last month’s survey data signalled a third successive monthly increase in new business, albeit well behind February’s spiking return to growth after a shallow downturn.
Business leaders remain upbeat about prospects however, with confidence charted at an 11-month high. New product launches, investment plans and expectations of a gain in market share supported firms' growth projections, according to anecdotal evidence.
Malcolm Buchanan, chair of the NatWest North Regional Board, said: "There were positive developments for Yorkshire & Humber businesses in April, with activity growth quickening and confidence improving. There was even a modest strengthening in demand conditions, and firms responded by boosting their staffing capacities.
"That said, compared to other parts of the UK, the region's performance is not so impressive. Growth was notably weaker than seen for the UK as a whole in April, with only the East Midlands and Wales recording weaker rates of expansion in business activity.
"Meanwhile, although cost pressures eased further, they remained substantial, reportedly due to higher wage demands in response to the cost-of-living crisis."
The rate of job creation quickened markedly since March to a solid pace that was the fastest since last September. Surveyed companies commented on the replacement of leavers and efforts to boost capacity.
Businesses registered a second straight monthly decline in the volume of outstanding business, and they were faced with another steep monthly rise in their operating costs. Salary expenses were noted as a key source of inflation by survey respondents. That said, the rate at which overall input prices increased was the slowest in just over two years, with downward pressures reportedly coming from raw material costs.
Prices charged for goods and services by private sector firms in Yorkshire & Humber continued to increase at the start of the second quarter. Output prices were reportedly lifted to offset the impact of rising costs. The rate of inflation was steep and accelerated slightly from March's 25-month low.
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