Business confidence in Yorkshire takes a hit in October

Companies in the region reported lower confidence in their own business prospects month-on-month, down 12 points at 40 per cent.

When taken alongside their optimism in the economy, down two points to 41 per cent, it gave a headline confidence reading of 40 per cent.

The Business Barometer questions 1,200 businesses monthly and provides early signals about UK economic trends both regionally and nationwide. 

A net balance of 38 per cent of businesses in the region expect to increase staff levels over the next year, up one point month-on-month, and the highest reading this year.

Overall UK business confidence remained steady month-on-month dipping by just three points to 43 per cent and remaining comfortably above the year-to-date average of 26 per cent.

Hiring intentions were unchanged on September’s reading at 37 per cent, while firms’ optimism in the economy, down four points to 44 per cent, and confidence in their business prospects, down one point to 42 per cent, both fell marginally.

All UK nations and regions reported positive confidence readings for the seventh consecutive month.

Firms in London, up three points to 65 per cent, the North East, unchanged at 61 per cent, and the East Midlands, up eight points to 55 per cent, had the highest confidence readings, while businesses in the South East, down 11 points to 21 per cent, and Wales, down 23 points to 23 per cent, had the lowest overall confidence levels.

Steve Harris, regional director for Yorkshire at Lloyds Bank Commercial Banking, said: “Businesses in the region have weathered many storms over the past 18 months and their resilience speaks for itself.

“While there are challenges in the broader economy, such as supply chain issues and labour shortages, it has not dampened firms’ continued focus on growth and recruitment.

“We understand how important the support of an investment partner can be at times like this, and we remain committed to standing by the side of businesses as they continue to champion the region’s continued economic growth.”

From a sector perspective confidence remained strongest in manufacturing, rising to a five-month high of 51 per cent, up two points from 49 per cent, with trading prospects being particularly positive, 60 per cent expecting stronger activity in the year ahead.

Additionally, 68 per cent of manufacturing firms are planning on bringing all furloughed staff back which is more than any other sector.

However, these firms are also less likely to say it is easier to find people with the right skills and experience.

Business confidence in retail and services fell slightly to 37 per cent, down five points from 42 per cent, and 43 per cent, down four points from 47 per cent, respectively, although they remain higher than three months ago.

59 per cent of firms in both retail and services expect all their furloughed staff to return, less than in manufacturing.

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James Mitchinson