A NatWest survey highlights growing optimism but jobs are still falling in private sector companies
Hull City Centre.(Image: pharbour)
Business optimism in the Yorkshire and Humber has reached a 15-month high as activity in the area returned almost to growth, a survey suggests.
The NatWest Regional Growth Tracker – which measures the month-on-month change in the region’s manufacturing and service sectors – remained just below the 50.0 no-change mark, but rose for a second month in a row in January to 49.3.
Private sector companies in Yorkshire and Humber region recorded back-to-back months of new business growth and firms taking part in the survey highlighted neww product launches, upbeat sales projections, planned investment activity and supportive economic tailwinds.
But payroll numbers in the area fell for a 14th consecutive month, with only Wales out of all of the UK’s regions and nations seeing a sharper fall in job numbers.
Malcolm Buchanan, chair of the NatWest regional board, said: “Sustained growth in demand for Yorkshire & Humber goods and services and a strengthening of firms’ year-ahead expectations for activity serve as promising leading indicators for the region’s economy. A softening of cost pressures, in tandem with stronger increases in prices charged, also bodes well from a margins perspective, implying a diminished strain on earnings.
“However, the local labour market continues to be challenged by a hesitancy among firms to grow their workforces. Payroll numbers fell for a 14th straight month in January, and at a rate that outpaced the UK-wide average. However, the more upbeat business outlook could spur hiring, as firms look to achieve their more bullish growth forecasts for 2026.”
The survey has been released as data being released tomorrow is expected to show that the UK economy has grown modestly again in the last three months of 2025 amid pressure from budget uncertainty.
The Office for National Statistics (ONS) will shed light on how the economy fared when it reveals the latest UK GDP (gross domestic product) data for December, and the final quarter and year as a whole. Economists have broadly predicted that the economy grew by 0.1% in the quarter, following growth of 0.1% in the third quarter.