The East Midlands is experiencing the fastest rise in new orders for almost seven years, according to the latest NatWest regional survey.
The bank’s latest East Midlands Business Activity Index employment has increased at steepest pace on record, as lockdown restrictions ease.
However businesses surveyed warned of a growing threat of inflation as cost pressures continue to mount amid supply-chain issues.
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The seasonally adjusted index signalled a third successive monthly expansion in business activity across the East Midlands.
The overall upturn was the fastest since February, 2018, with companies across the East Midlands signalling a marked increase in new business, with the rate of expansion quickening to the fastest since August, 2014.
NatWest said although substantial, the pace of increase was among the slowest of the 12 monitored 海角视频 regions.
Having said that, and despite fears of new variants of Covid-19, business confidence among East Midlands companies remained markedly upbeat in May, thanks to stronger client demand.
The level of positive sentiment was the softest for three months, however, amid concerns surrounding the sustainability of current demand conditions, and slightly weaker than that seen across the 海角视频 as a whole.
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The May data also signalled a sharp increase in workforce numbers across the East Midlands private sector. The rate of job creation accelerated notably and was the fastest since data collection began in January 1997, and quicker than that seen across the 海角视频 as a whole.
The data also showed firms across the East Midlands saw a third successive monthly accumulation in backlogs of work in May. The pace of increase was the quickest since November 2000, despite being slightly slower than that seen across the 海角视频 as a whole.
Alongside strain on capacity following a sharp upturn in new orders, manufacturers noted that component shortages exacerbated constraints.
Average cost burdens across the East Midlands private sector also rose substantially in May - with the rate of input price inflation the steepest since July, 2008.
Higher costs were often attributed to greater material and component costs following significant supplier shortages and delays.
East Midlands firms said output charges went up on the back of that.
John Maude, who sits on the NatWest Midlands and East Regional Board, said: “Firms across the East Midlands continued to signal strengthening demand during May, as output growth was spurred on by stronger client demand.
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“The easing of lockdown measures and greater reopening of the economy reportedly drove the customer spending increase.
"Such upturns in demand conditions inevitably exerted greater pressure on capacity as backlogs of work rose at the sharpest rate since November 2000.
“Constraints on operating capacity remained despite the fastest pace of job creation on record, as component and input shortages exacerbated strain on workforces.
"Once again, soaring cost burdens were reported. Input price inflation was the steepest since July 2008, with firms seeking to pass on a large proportion of this hike in costs to their customers."