Yorkshire businesses named as one of UK's most optimistic regions with just four percent of firms still closed

The latest Business Barometer from Lloyds Bank Commercial Banking showed that almost half of firms said they expected to be operating at more than 50 per cent of capacity by the end of June, with just four per cent saying they did not expect to be operating at all.

A fifth said it would take three months until they were back to operating at pre-Covid-19 levels, with only 6 per cent expecting it to take more than 12 months.

Business confidence understandably remains low but rose eight points in Yorkshire during June to -23 per cent.

Economic optimism climbed 14 points at -26 per cent.

In total Yorkshire had a headline confidence reading of -23 per cent, above the UK average of -30 per cent, while making Yorkshire the second least pessimistic region in the UK, behind the West Midlands.

Paul Varley, regional director for Yorkshire & the Humber at Lloyds Bank Commercial Banking, said: “There are encouraging signs in June’s Barometer reading, with Yorkshire firms having one of the least pessimistic outlooks in the UK.

“The region has the smallest proportion of companies not operating and the highest percentage of firms working above half capacity – so it does indicate that business confidence is starting to pick up.

“With further easing of restrictions and social distancing measures, we hope that the region’s outlook continues to improve.”

The majority of firms continued to see demand fall during June, though the picture improved month-on-month.

While 63 per cent experienced a fall in demand for their products and services, this was down six points on May.

Meanwhile, 14 per cent experienced an increase in demand, up two points on the month before.

Of the 69 per cent of businesses reporting disruption to their supply chain during June, 28 per cent expected the situation to improve within three months, with just three per cent expecting it to take more than 12 months.

Across the UK, business confidence grew marginally month-on-month, rising three points.

The West Midlands was the least pessimistic region at -18 per cent, followed jointly by Yorkshire and the North East.

Scotland was the most pessimistic, with confidence dropping eight points month-on-month.

In June, the construction sector rebounded strongly, increasing 30 percentage points to -14 per cent. The retail sector increased two points to -23 per cent and manufacturing saw an improvement at -35 per cent.

These were the highest levels seen since March.

Hann-Ju Ho, senior economist, Lloyds Bank Commercial Banking, said: “While the results suggest the economy may be starting to see some improvement, trading conditions remain difficult for most firms as the majority are still experiencing disruption to supply chains.

“Hopefully, the recent Government announcement of further relaxation of restrictions and the slight easing of social distancing measures will enable more businesses to reach their capacity and resume their usual activities, which we would expect to be reflected in further improvements to optimism next month.”