Growth in business activity fell to a 15 month low in Yorkshire and the Humber in May.
The weak increase was described as signalling a marked loss in momentum, with easing underlying demand pressures, customer destocking and price hikes all cited as drags on new business inflows.
Trends across both manufacturing and services deteriorated over the month, according to analysis for the NatWest PMI Business Activity Index.
The seasonally adjusted barometer has now fallen 12 points since March, with a 6.1 point drop month-on-month accelerating April’s slowdown.
It came with series record price inflation, surpassing last November’s peak. Increased supplier fees, as well as rising commodity and energy costs, were cited by panel members.
Optimism remains though, with the region once again topping confidence charts in the 12 monitored areas.
According to anecdotal evidence, planned company expansions through hiring and investment, as well as expectations of stronger demand, underpinned the positive outlook.
Richard Topliss, chair of NatWest North regional board, said: “May survey data highlighted another marked loss of growth momentum across Yorkshire and the Humber's private sector economy as business activity rose only modestly and at the slowest pace since February 2021.The weaker upturn is a reflection of softer trends across both manufacturing and services – while the former has to contend with continued supply-side disruptions, momentum is easing in the latter amid the rising cost of living and the fading post-Omicron rebound.
"Price pressures were another notable facet of the latest survey data. Input costs rose at the steepest rate ever seen in over 25 years of data collection in May, leading firms to raise their prices charged to a substantial degree.
"Overall, the direction of travel for the economy seems to be one-way amid substantial downside risks. Activity levels are going to be tested in the coming months as rapid inflation puts demand under pressure."
On employment, only the South West and London registered stronger rises in workforce numbers than Yorkshire and the Humber.
Costs led to a further steep increase in average prices charged by firms in Yorkshire ad the Humber for goods and services. Although the rate of inflation eased slightly from April's survey record, it was the third-strongest since data on output prices were first collected in 1999.
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