Business confidence in Yorkshire and Humber has surged to its highest level in eight months, according to the latest regional economic survey from NatWest.
Key Economic Indicators Show Improvement
The NatWest Yorkshire & Humber Business Activity Index, which tracks monthly changes in manufacturing and service sector output, recorded a significant increase from 45.2 in September to 49.4 in October. While any figure below 50 still indicates overall economic contraction, this represents the most substantial improvement seen in recent months and suggests the region's economy is moving toward recovery.
New orders placed with private sector companies in the region grew for the first time since March, making Yorkshire and Humber one of only six monitored UK areas to experience demand growth during this period.
Business Optimism and Expansion Plans
Local companies have reported increased optimism about their prospects for the coming year, with many pointing to specific growth strategies as reasons for their positive outlook. Malcolm Buchanan, chair of the NatWest Regional Board, highlighted several encouraging developments.
"October presented a positive outlook for the local economy in Yorkshire & Humber," Buchanan stated. "A renewed rise in demand for goods and services - the first since March - bodes well for activity in the near-term."
He added that businesses are looking ahead to the next 12 months with strengthened optimism, with growth expectations reaching their strongest point in eight months. Many local business leaders specifically mentioned acquisitions, new product developments, and capacity expansions as drivers of their positive sentiment.
Employment and Inflation Trends
The survey also revealed that businesses have adapted to recent economic challenges by improving their operating efficiency, which has helped slow the decline in private sector employment. Buchanan noted that if the current upturn in sales continues, it could potentially drive growth in local payroll numbers.
Another positive development for local firms has been the downward path of cost inflation. Companies appear more confident about their pricing power, with average prices charged rising at a quicker rate than in September.
However, the encouraging business survey results come alongside less positive employment statistics. Regional unemployment figures published simultaneously show Yorkshire and Humber's unemployment rate has risen to 5.5%, placing it above the national average. On a more positive note, the region did see a drop in the rate of people classified as 'economically inactive'.
