Manufacturing and services firms in the region reported their 12th consecutive monthly rise in new business for the month of November.

The Purchasing Managers' Index report for Yorkshire and Humberside said businesses were reaping the benefits of rising demand, and at the same time increasing effic-iency by cutting costs.

But despite reducing their workforce, firms are still operating well beneath their full capacity, the report for the Royal Bank of Scotland said.

Lucy O'Carroll, head of UK macroeconomics at The Royal Bank of Scotland, said the survey of a panel of businesses across the district revealed the fastest growth of new businesses since April.

"This month's survey suggests buoyant levels of activity among Yorkshire and Humberside companies and, with a considerable rise in levels of incoming new business, the outlook for the region's economy looks favourable," she said.

"A further cut in employment levels, albeit at a slower pace than in the previous month, is reported by compa-nies, mainly as a result of drives to improve efficiency and lower costs. Nevertheless, evidence of spare capacity remains widespread among companies based in the region."