Recent data has revealed that business activity in Yorkshire and the Humber declined in September.
According to NatWest’s latest regional PMI data, the Yorkshire and Humber Business Activity Index fell to 45.2 in September, down from 47.7 in August.
The index measures month-on-month changes in output from the region’s manufacturing and services sectors, with a reading below 50 indicating a decline.
Malcolm Buchanan, chair of the NatWest regional board, said: "The soft patch in the Yorkshire & Humber economy continued in September.
"Businesses reported lower demand for goods and services, prompting cutbacks to employment and restraint when it came to price setting, despite elevated cost pressures.
"Yorkshire & Humber isn't alone in facing these economic headwinds, being one of six parts of the UK to see both new business and employment levels fall at the end of the third quarter.
"The good news is that, despite weak trends in activity and demand, local companies are looking to the future with optimism.
"In fact, growth expectations strengthened slightly in September, with survey respondents citing strong pipelines and investment plans as reasons to be confident."
The report highlighted that the region has now seen six consecutive months of declining new business, with clients delaying spending decisions and reducing order volumes.
Only Northern Ireland, Wales, and the East Midlands recorded steeper falls.
Despite the current downturn, businesses in Yorkshire and the Humber remain optimistic.
Growth expectations edged higher in September, supported by investment plans, upbeat sales forecasts, and strong pipelines, though confidence remains below the UK average.
Employment continued to decline, marking an ongoing trend that began at the end of last year.
Redundancies and not replacing departing staff contributed to lower headcounts, with the rate of decline slightly outpacing the national average.
Outstanding business also fell sharply, with only the East Midlands and Wales seeing faster reductions in backlogs.
Some firms reported that all orders had been completed.
Price pressures showed signs of easing, although operating expenses continued to rise month-on-month.
The rate of inflation fell to a six-month low and was slightly below the UK trend.
Salary costs remained a key contributor to cost pressures.
Firms continued to increase selling prices, but the pace of growth slowed and remained below the national average.
Yorkshire and the Humber’s manufacturing sector remains concentrated in Other Manufacturing, Chemicals & Plastics, and Basic Metals.
The services sector is focused on Transport & Communication, Hotels, Restaurants & Catering, and Personal & Community Services.
Share