Business confidence in Yorkshire and the Humber amongst the highest in the UK

Firms across Yorkshire and the Humber are more confident about their future than their UK and European counterparts, where optimism is +40 per cent and +19 per cent respectively.

The latest results show that inflation expectations remain high in the region but have eased from earlier in the year and continue to decrease from the peak in June 2022. This is especially true for staffing costs, where a net balance of +64 per cent of businesses predict wages to rise over the next 12 months, again down from +69 per cent in February.

The research suggests that most companies are raising their prices to offset the impact of higher costs.

In total, +41 per cent of firms in the region forecast an increase in their prices.

Strong expectations for business activity in the region were reported alongside positive predictions for research and development spending, which rose 27 points from the -5 per cent reported in February to +22 per cent. Predictions for employment and capital expenditure in Yorkshire and the Humber were also higher than the UK averages.

The number of firms in the region expecting a net gain in profits stands at +41 per cent, up from +8 per cent in February and significantly higher than the UK average of +15 per cent.

Helen Morgan, Leeds City Region lead for Accenture, said: “Businesses across our region have continued to show resilience despite testing times, with confidence higher than in any other UK region.”

She added: "Despite inflation and staffing costs remaining a concern, it is encouraging to see the marked jump in profit expectations. These have largely been driven by the service sector, which has had a notable rebound since February, likely due to resilient demand in services helping to improve positive projections for demand and pricing power.

“It is also encouraging to see the jump in R&D spending projections in Yorkshire. Investing now in advanced technologies like AI and automation will be crucial for firms looking to improve future productivity.”

Nationally, +40 per cent of businesses remain confident that activity will continue to grow.

The latest results show that inflation expectations remain stubbornly high (+51 per cent), but have eased from earlier in the year (+59 per cent). This is especially true for staffing costs, where a net balance of +72 per cent of businesses predict wages to rise over the next 12 months, again down from 77 per cent in February.

The research suggests that most companies are raising their prices to offset the impact of higher costs. In total, +45 per cent of firms forecast an increase in their prices. This figure has fallen steadily over the last 12 months but remains three times higher than the proportion of firms (+15 per cent) expecting a net gain in profits.