Job creation in Yorkshire and the Humber hit two-year high in May, reports latest Lloyds Bank PMI

The rate of job creation in Yorkshire and the Humber hit a two-year high in May as business activity expanded at the fastest pace this year, according to the regional Lloyds Bank PMI report.

The increased number of employees has been attributed to greater demand, with new orders growing for the tenth month running.

The Yorkshire and Humber PMI registered 57.7 in May, up from April’s reading of 56.8 and second only to the East Midlands at 57.9.

This was due to an increase in output of goods and services in the region. A reading above 50 signifies growth in business activity, whereas a reading below shows decline.

Yorkshire’s growth in business activity was the second-fastest nationally and faster than the UK average (54.4).

Meanwhile, input costs, such as the price of raw materials and wages, continued to put pressure on firms, increasing for the fourteenth consecutive month. This was passed on to customers in the form of higher prices charged.

Business confidence in Yorkshire remained stable, and firms were more optimistic compared with the UK as a whole. Businesses in the region attributed this to new product development, planned investment and strong demand.

The Lloyds Bank Regional PMI, or Purchasing Managers’ Index, is an economic health-check of the UK regions. The index report is based on responses from manufacturers and services businesses about the amount of goods and services produced during May compared with a month earlier.

Leigh Taylor, regional director for Yorkshire at Lloyds Bank Commercial Banking, said: “May saw another standout month for the Yorkshire economy, with the report suggesting it was the healthiest period overall for the region this year.

“Although input costs have risen now for 14 months, the rate of increase has slowed since February’s peak, which will be welcomed by firms. However, rising costs will make it all the more important for firms investing in growth to manage working capital effectively.”