Business activity in the region saw a record contraction in April, as coronavirus led to the nation locking down.
The decline eclipsed the low of the global financial crisis.
According to the latest NatWest PMI survey, activity in Yorkshire & Humber fell at an unprecedented rate.
Measures to stifle the spread of Covid-19 drove widespread temporary business closures. Demand subsequently evaporated, with new orders falling at a record pace. Meanwhile, firms cut their staff numbers at the fastest rate since data collection began in January 1997.
Looking forward, optimism towards the one-year business outlook hit a record low, with some panellists fearful of a prolonged downturn.
The headline NatWest Yorkshire & Humber Business Activity Index – a seasonally adjusted index that measures month-on-month changes in the combined output of the region’s manufacturing and service sectors – posted 15.9 in April, down sharply from 41.2 in March. The latest reading pointed to the quickest contraction in Yorkshire & Humber business activity since the survey’s inception over 23 years ago.
At the sub-sector level, the result was driven by a broad-based reduction across both manufacturers and service providers, although the latter recorded the sharper decline. When explaining falling output, panellists often cited temporary business closures amid the coronavirus outbreak.
Underlying data suggested that services firms fared slightly worse than their manufacturing counterparts, but both sub-sectors registered historic declines.
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While staff numbers were cut drastically in April, the rate of workforce contraction was slightly softer than the 海角视频 average.
Despite employing fewer staff, softer inflows of new orders saw businesses work through backlogs at the start of the second quarter. Moreover, the reduction was sharpest on record, primarily driven by an unprecedented contraction in the service sector.
For the first time in just over four years, input prices faced by private sector firms in Yorkshire & Humber fell in April. Anecdotal evidence suggested that a slump in activity had driven suppliers to offer discounts on some products, while there were also mentions of lower payroll costs. That said, the overall decrease in cost burdens was only marginal and the fourth slowest across the 12 monitored 海角视频 regions.
Yorkshire & Humber firms opted to pass on some of the lower costs to their clients with a decrease in average output prices. The result marked the first reduction in prices since December 2015.
Business sentiment fell further in April to a new record low. Although firms anticipated a rise in activity over the coming 12 months as lockdown measures are lifted, optimism was subdued amid fears of a slow recovery.
Richard Topliss, chair of the NatWest North Regional Board, said: “Yorkshire and Humber businesses suffered immense hardship in April, with historic contractions in both output and new work amid the Covid-19 lockdown.
“The latest PMI data revealed the truly devastating impact the virus is having on business conditions, with figures far worse than during the initial downturn in March.
“However, despite extremely difficult circumstances, Yorkshire & Humber performed well relative to other regions. The indices for output, new orders and employment all posted above the national averages highlighting the resilience of private sector businesses in the region.”