Business activity across Yorkshire in December suffered the quickest decline since 2009, according to research from NatWest.
The new figures, released as part of the bank’s Yorkshire & Humber PMI, showed the poor performance was driven by a faster contraction in new orders, as companies also struggled to pick up new business.
December saw the country head to the polls for the 2019 General Election, as wider confidence lingered amid political uncertainty.
Looking ahead, businesses remained are more optimistic for 2020.
Richard Topliss, chair at NatWest North Regional Board, said: “The latest PMI results painted a disappointing picture for business activity in Yorkshire & Humber during December.
“The headline index fell to the lowest level for over ten-and-a-half years, partly driven by an acceleration in rate of new order decline.
“However, the result should be taken in the context of a UK-wide activity contraction, in which three of the other 11 monitored regions recorded sharper reductions than Yorkshire & Humber.
“Moreover, with the rate of job cutting in the region easing to the softest for three months, there are signs that the severity of downturn could be short-lived.”
Reduced inflows of new business allowed firms to alleviate backlogs of work at the sharpest rate for nearly seven-and-a-half years.
On the cost front, input prices rose at a marked rate and firms opted to pass on some of the burden to their clients with an increase in average output charges.
The headline NatWest Yorkshire & Humber Business Activity Index – a seasonally adjusted index that measures month-on-month changes in the output of the region’s manufacturing and service sectors – posted 47.6 in December, down from 49.7 in November.
The reading signalled the fastest contraction in Yorkshire & Humber business activity for over ten-and-a-half years, with both manufacturers and service providers registering sharp declines.
It comes just days after Hull & Humber Chamber of Commerce chief executive Dr Ian Kelly said business across the estuary was showing “signs of optimism” for 2020, despite a difficult final quarter of last year.
Dr Kelly said: “Chancellor Sajid Javid has set March 11 for the next Budget in which he is promising to invest billions of pounds across the country with the Treasury prioritising the environment which should sit well with the Humber’s carbon reducing ambitions.
“We hope to see substantial investment on both banks of the Energy Estuary in 2020.”
Hull business news
A key factor behind the latest downturn in activity, according to NatWest, was a further reduction in new business at firms in Yorkshire and Humber.
Cost burdens faced by firms in Yorkshire & Humber continued to rise markedly in the final month of 2019.
Firms passed on some of the higher costs to their clients, with a rise in average output charges during December. The rate of inflation eased from November’s three-month high but remained quicker than the UK average.
Finally, firms were confident of a rise in activity during 2020, but the degree of optimism was the weakest for three months.
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Business Live’s Hull & East Yorkshire journalist is Phil Winter, also the business editor at the Hull Daily Mail and Hull Live.
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