A new report on business activity in the North East has recorded the second successive rise in output.

The headline NatWest North East PMI Business Activity Index – a seasonally adjusted index that measures the month-on-month change in the combined output of the region’s manufacturing and service sectors – posted 54.0 in April, up notably from 50.2 in March.

 The uptick largely reflected improved demand for North East goods and services, according to anecdotal evidence. The latest expansion in business activity at North East private sector firms was solid, the strongest for a year and largely in line with the UK average.

April survey data saw new orders placed with private sector firms across the North East rise for the first time in one year. Increased marketing and an influx of new customers were among the reasons behind growth, anecdotal evidence showed. Furthermore, the rate of expansion was solid and largely in line with the UK average.

The level of employment across the combined manufacturing and service sectors of the North East rose for the second month in a row in April. The rate of jobs growth hit a ten-month high and was faster than the UK average, though only marginal overall. Survey respondents mentioned that job creation reflected an anticipated increase in new business.

Companies across the North East reported increasing average input prices in April, as has been the case on a monthly basis for nearly four years. The rate of cost inflation jumped notably to an 11-month high.

The new national minimum wage reportedly raised staffing costs, though some firms reported increased raw material prices. Of the 12 monitored UK regions and nations, only the South West and London posted stronger inflation than that seen locally.

Prices charges for the provision of North East goods and services rose again in April. The rate of inflation picked up to the most marked since May last year and was sharp overall. Increased costs, including wages were partly passed on to clients, according to panellists. The rate of charge inflation in the North East was the strongest of all 12 monitored UK areas.

Despite an increase in new work, the level of outstanding business at North East private sector companies fell at a sharper pace in April. The rate of depletion was solid and the quickest for three months, supported by the recent uplift in payroll numbers. The North East posted a decline in backlogs of work that was quicker than that seen at the UK level.

The Future Activity Index edged further above the neutral 50.0 mark in April, to indicate stronger confidence toward activity levels for the year ahead among North East firms.

According to anecdotal evidence, improved forecasts for market conditions generally underpinned optimism. The degree of positive sentiment across the North East was the most upbeat for 30 months, but nevertheless remained subdued compared to the UK average.