Yorkshire and the Humber taking gloomier view than other places

The data shows that firms in Yorkshire and the Humber are less positive about the main indicators of business health than any other part of the UK.

According to the latest UK Business Confidence Monitor (BCM), the region has also seen the steepest falls in forecasts for growth in turnover and gross profits.

Yorkshire and the Humber has also seen a far greater rise in unemployment than any other English region over the last 12 months, which could be contributing to the pessimistic forecasts.

Regional Director Chris Manners said: "Official unemployment statistics reflect firms' assertions that the number of employees in the Yorkshire and the Humber declined by four per cent over the year to date.

"This is the steepest decline of any region and compares to a UK average fall of just two per cent – and the prognosis for the coming 12 months shows only an increase of headcount of around 0.7 per cent."

The Institute of Chartered Accountants believes this may be a reflection on the region's heavy reliance, certainly in Leeds, on the financial services sector, with bank and building society amalgamations reducing branches and streamlining staffing.

Mr Manners said that concerns over regulatory requirements among local businesses have also risen with nearly half (44 per cent) reporting that the regulatory regime is a greater challenge to business performance, up from 34 per cent last quarter and 21 per cent on a year ago.

"Financial intermediation accounts for around 6.9 per cent of output here – more than any other English region outside London – so concerns over financial services regulation could be driving this," he said. Gross profits in Yorkshire and the Humber are projected to grow by 3.4 per cent over the next 12 months, up from a decline of 2.2 per cent over the year to date.

Sales volumes are forecast to expand by 4.0 per cent over the coming year after a contraction of 3.2 per cent over the last.

The region's overall confidence has fallen by 2.2 points this quarter, bringing it into line with the UK average score of 25.5.

Mr Manners said: "Perhaps the only sliver of optimism can be seen in the fact that firms who feel customer demand is now a greater challenge to business performance than 12 months ago stands at 31 per cent this quarter. This compares to 46 per cent in the first quarter of 2010 and 64 per cent a year ago.

"Perhaps the overall picture regionally is one of cautious and steady revival, but with a number of caveats along the way."

Nationally, there has been a broadening of recovery in more sectors, regions and sizes of business.

These latest findings will be discussed at a business breakfast event hosted by Pro Sheffield on Tuesday June 22 at the Kenwood Park Hotel, Sheffield, starting at 7.45am.