Business confidence drops for Yorkshire firms despite many planning to increase staff numbers
Business confidence in Yorkshire fell 15 points in August to 46 per cent, according to the latest Business Barometer from Lloyds, despite many of the region’s firms planning to take on additional staff.
Companies in Yorkshire reported lower confidence in their own trading outlook month-on-month, down eight points at 52 per cent. When taken alongside their optimism in the economy, down 22 points to 40 per cent, this gave a headline confidence reading of 46 per cent – down from 61 per cent in July,
Yorkshire firms’ confidence in the economy was driven by strong customer demand (60 per cent) and improving interest rates (45 per cent), while confidence in their own trading outlook was driven by strong market demand (56 per cent) and strengthening supply chain conditions (44 per cent).
A net balance of 40 per cent of businesses in the region also expect to increase their staff levels over the next year, down 19 points on last month.
Business confidence in Yorkshire still sits above the 12-month average of 44 per cent, with its highest figure of 62 per cent in March 2026.
Looking ahead to the next six months, Yorkshire businesses identified their top target areas for growth as investing in their team, entering new markets, and introducing new technology, such as AI or automation.
Martyn Kendrick, regional director for Yorkshire at Lloyds, said: “Despite a dip in business confidence, it’s encouraging to see businesses in Yorkshire still backing themselves to grow.
“Strong consumer demand, improving financial conditions and better supply chain conditions are providing reasons for optimism.
“Four in ten businesses expect to grow their teams over the next year, and many are already planning to enter new markets and introduce new technology.”
Nationally, UK business confidence increased four points in August to 53 per cent, the highest reading since the start of the Middle East conflict in March (55 per cent) and above the 12-month average of 47 per cent.
This was driven by a second month-on-month increase in economic optimism, up 18 points since June.
Optimism in the wider economy rose seven points to 49 per cent, compared to a 12-month average of 37 per cent.
Of those surveyed, 64 per cent said they were optimistic (up five points from July) in the wider economy, while those who felt pessimistic decreased by two points to 15 per cent. The main factors cited by firms who felt more positive included stronger customer demand and improving financial conditions.
Amanda Murphy, CEO of Lloyds Business and Commercial Banking, said: “It's encouraging to see business confidence rise for the second month in a row, reaching its highest level since March.
"While international firms remain more confident, it’s good to see domestic companies register a strong month-on-month increase.
"Overall, businesses are reporting stronger customer demand, greater optimism about the wider economy and growing confidence in their own trading outlook, all of which will be helping to support investment and growth plans.
"While businesses continue to operate in a challenging environment, easing cost pressures and fewer firms expecting to raise prices in the coming year, should allow them to focus less on managing headwinds and more on pursuing growth."