Private sector firms in Yorkshire saw their strongest growth in output for 15 months, while Government-backed funding schemes boosted regional house sales in April two new reports show.

Businesses taking part in the latest Lloyds TSB Yorkshire & Humber PMI report highlighted a strong rise in new business and further cuts in work backlog.

But higher activity levels failed to stem job losses, with regional employment falling for the third month running and at the highest level since August, 2011.

Business activity rose for the sixth consecutive month, with the bank’s Lloyds TSB regional business activity index – which measures the combined manufacturing and service sector output – remaining above the 50.0 no-change mark.

The index rose to 55.7 from 53.3 in March and was the highest amongst the English regions and boosted by stronger demand and new contract wins.

The volume of new business won by private sector companies rose strongly, although the growth rate was slightly weaker than March’s near two-year peak level.

But firms reduced their workforces in April for the third month running, with the latest reduction the sharpest since August, 2011. Job losses affected both the manufacturing and service sectors. Input costs continued to rise in April, particularly fuel and raw materials. Some firms also blamed unfavourable exchange rates for pushing up costs . Meanwhile, lower selling prices were recorded in both the manufacturing and service sectors, with the overall reduction the biggest all UK regions.

Martyn Kendrick, area director for Lloyds TSB Commercial Banking in Yorkshire, said: “Yorkshire & Humber’s private sector picked up in April, with the rate of business activity growth the strongest since January, 2012. The latest increase in activity partly reflected a strong rise in new business, and was the second-strongest among the 12 UK regions behind Wales.

“Despite this, it is disappointing that the increases in activity and new business have not yet translated into renewed job creation, with firms on the whole reporting job losses for the third month running.”

New home buyer enquiries rose to their highest level since October according to the latest Royal Institution of Chartered Surveyors residential market report. Activity had been boosted as the government’s Help to Buy and Funding for Lending schemes started to kick-in.

RICS said 11 per cent more regional surveyors reported rising rather than falling demand The latest jump in enquiries suggested that Help to Buy was attracting interest, even through the mortgage guarantee scheme does not take effect until 2014.

New sale instructions also rose, with surveyors optimistic about future house prices. The number of surveyors expecting prices to fall rather than rise over the next three months was the lowest since January, 2010.