Yorkshire firms’ summer blues persist

Business confidence in Yorkshire rose just one point during July to 6 per cent, way below the national average of 13 per cent, according to Lloyds Bank’s monthly Business Barometer.
Kelly Green, regional director for Yorkshire & the Humber at Lloyds Bank Commercial BankingKelly Green, regional director for Yorkshire & the Humber at Lloyds Bank Commercial Banking
Kelly Green, regional director for Yorkshire & the Humber at Lloyds Bank Commercial Banking

Companies in the region reported lower confidence in their business prospects, which fell five points to 7 per cent, but higher economic optimism at 5 per cent. Together, this gives an overall confidence figure of 6 per cent.

Businesses’ hiring intentions showed a net balance of 2 per cent of businesses in the region which expect to hire more staff during the next year. This is an improvement on June when a net balance of 9 per cent expected to reduce staff levels.

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Kelly Green, regional director for Yorkshire & the Humber at Lloyds Bank Commercial Banking, said: “It’s encouraging to see that business’ plans for staff levels has returned to growth although the overall outlook remains subdued, with falling optimism around firms’ trading prospects.

“Managing cashflow and working capital carefully are always important, but they will be especially so for businesses if they anticipate facing tougher trading conditions in the months ahead."

Ms Green said Lloyds has pledged £1.4bn of lending to Yorkshire firms in 2019.

"We’ll be by the side of our region’s businesses whatever challenges or opportunities they face," she said.

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Across the region, a net balance of 12 per cent of businesses said they felt that the UK’s exit from the European Union was having a negative impact on their expectations for business activity, down 11 points on a month ago.

Across the UK, overall confidence stood steady at 13 per cent as firms’ confidence in their own prospects slipped three points to 19 per cent, while their economic optimism remained at 5 per cent.

Businesses in the South West were the most confident, at 29 per cent, ahead of the East Midlands (26 per cent) and West Midlands (19 per cent).

Those in Scotland were the least confident, with an overall confidence of zero per cent, 13 points below the national average.

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Manufacturing was the most upbeat sector, with overall confidence rising nine points to 19 per cent and overtaking retail, which fell five points to 17 per cent.

Overall confidence among services businesses was unchanged at 12 per cent, but construction dropped 11 points to six, the sector’s lowest reading in more than 18 months.

Hann-Ju Ho, senior economist at Lloyds Bank Commercial Banking, said: “It is promising to see national confidence levels continuing to beat the dip seen in February despite business confidence remaining below the long-term average and overall business confidence remaining unchanged this month.

“Coupled with this, employment expectations still remain largely unchanged from last month, with only one-third of firms planning to increase their staff levels, compared with more than 40 per cent of firms last year, suggesting cautious business behaviour in the current economic environment.”

The Business Barometer questions 1,200 businesses every month and provides early signals about UK economic trends both regionally and nationwide. 100 businesses in Yorkshire were asked their opinion.

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