February saw the strongest increase in business activity across the Yorkshire and Humber region since the start of last summer.
Analysis of the latest NatWest Yorkshire & Humber PMI Business Activity Index showed output from the manufacturing and service sectors ended a four-month downturn, with the region among the strongest performers.
The headline measure was up into growth territory at 52.6, from 48.6 in January - with 50 the switch - the first expansion since September. It comes as the Chancellor revealed the UK is set to avoid entering a recession in his Budget speech this week.
Read more: Pioneering fire retardant timber treatment provider nails funding for expansion
Malcolm Buchanan, chair of the NatWest North regional board, said: "After four successive months of contraction, private sector business activity across Yorkshire and the Humber increased during February. The improvement was in line with the UK-wide trend, and the region was in fact one of the UK's top performers in the latest survey period with only London, the South East and West Midlands recording stronger expansions.
"The renewed upturn in activity was accompanied by an improved trend in sales, which suggests underlying business conditions have certainly picked up since the end of last year. This has facilitated stronger employment growth across the region, and bodes well for near-term prospects.
"A further weakening of input price inflation will also be welcomed by firms. That said, cost pressures remain steep and companies continue to respond by marking up their charges, suggesting that sellers remain confident in their pricing power."
New contracts and customer restocking was reported by panel members, though new business saw the weakest growth across the UK - with only Wales, in decline, faring worse.
Surveyed businesses were optimistic of growth over the next 12 months during February, and although the level of confidence eased slightly, it was stronger than that seen for the UK as a whole.
Expected increases in orders, new product launches and market share gains were noted as reasons to be confident. Job creation was solid and quickened to a five-month high.
Read next:
Humber's freeport status could be declared in days
Volta Trucks' EV approval to bring huge Hull orders to life as 240 jobs are created
Hull toolmaker invests big to aid global manufacturers as it eyes expansion
Keadby Two Power Station enters commercial operations as the most efficient plant of its kind in Europe
All your Humber business news in one place - bookmark it now
