Smaller firms are set to provide a regional jobs boost in 2014, according to new findings from Yorkshire Bank.

The optimistic outlook is reinforced by the latest Reed Job Index, which says the New Year will see the tide turn for the UK jobs market with the rate of growth in new vacancies overtaking job applications for the first time in five years.

Manufacturers have also enjoyed their best quarter for more than two and a half years, according to another key report.

The bank survey shows that about a quarter of the region’s small and medium businesses are planning to grow employee numbers. The average workforce expansion among Yorkshire’s 354,000 SMEs is expected to be two per cent, which would add nearly 21,000 jobs.

Nationally, more than half of manufacturing and accountancy firms said they intend to recruit, which the research suggests could add 417.000 jobs.

Alan Young, Yorkshire Bank’s regional director for business and private banking, said: “As the UK economic outlook continues to improve, we are starting to see a positive impact on recruitment plans. Increasing staff numbers can help businesses to boost productivity and competitiveness and allow expansion into new markets as capacity grows.

“While our research suggests that many businesses are becoming more confident about investing in their future, it is important that we recognise there remain considerable challenges to growth.”

According to the latest monthly Reed Job Index, jobseekers will have a wider choice of new jobs in 2014 than at any point in the last five years as the number of UK job opportunities has increased across all sectors in the last 12 months.

Meanwhile, the closely-watched Markit/CIPS purchasing managers' index – where the 50 mark separates growth from contraction – showed a reading of 57.3 in December, marking the ninth consecutive month of rising output.

Andy Tuscher, regional director of EEF, the manufacturers’ organisation, said: “Manufacturers ended the year on a strong note and rising production, new orders and increased employment in December provided a springboard for growth going into 2014.”