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Yorkshire and Humber economy falls back into contraction, survey suggests

Business activity in Yorkshire and Humber is declining after a brief period of growth, an influential business survey suggests.

The NatWest Yorkshire & Humber PMI Business Activity Index, which measures change in the region’s manufacturing and service sectors, fell to a score of 48.3 in February, below the crucial 50.0 mark which separates growth from contraction. It had briefly moved into a positive score in January, but has fallen back at the same time that private sector nationally showed sustained growth.

The survey suggests a number of area of concerns, with Yorkshire and Humber showing the fastest rate of decline of the 12 monitored regions and nations of the UK in both new orders and employment. Despite that, business optimism in the area was slightly stronger than the national average.

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Business also said that costs remained stubbornly high and cited increased transport costs and greater wage pressures for weighing on their bottom lines.

Malcolm Buchanan, chair of the NatWest North Regional Board, said: “After a promising rebound at the start of the year, Yorkshire and Humber’s economy has slipped into contraction again. What’s noteworthy is the region’s divergence from the wider UK trend, which was of robust expansion in February, and suggests the national recovery from recession will be a disjointed one at the regional level.

“Of concern are trends in employment and new business, which were the weakest seen across the 12 monitored parts of the UK. Companies are also struggling with still-elevated inflation and are passing this on to customers despite the weakness in their sales performances. That said, a rebound in business confidence suggests companies are expecting this setback to be temporary.”

Further indicators of the health of the region’s economy will come with today’s release of official unemployment figures, while Wednesday will see the Office for National Statistics release data for January’s GDP at a national level.

Original artice – https://business-live.co.uk/all-about/yorkshire-humber

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