Confidence among Yorkshire business plummeted during July as the prospect of a no deal Brexit scenario dented hiring intentions.
Latest figures for firms in the Yorkshire & the Humber area showed that confidence levels fell 16 points during July to 19 per cent, that is according to the latest Business Barometer from Lloyds Bank Commercial Banking.
Companies in Yorkshire reported lower confidence in their business prospects at 16 per cent, which was 25 points lower than in June, and lower economic optimism at 22 per cent, down six points since June.
Together, this gives an overall confidence of 19 per cent, which is 16 points below last month’s figure of 35 per cent.
As a result, companies reined in their recruitment plans for the year ahead, with a net balance of 12 per cent of businesses in the region now saying they expect to hire more staff during the next year, down 11 points on last month.
Across the region, a net balance of four 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. This contrasts to a net balance of six per cent that felt it would have a positive impact in June.
Steve Harris, regional director for Yorkshire at Lloyds Bank Commercial Banking, said: “With so much uncertainty, businesses are finding it difficult to accurately predict and plan for the future.
“It is difficult to pinpoint the causes for the disparity in Yorkshire confidence than that seen elsewhere. Despite the fact that exports from Yorkshire have grown in the past year, concerns about what a hard or no deal Brexit may mean for the region, as well as the ongoing delays in devolution decisions together with a perceived lack of investment in transport could be dampening optimism towards future opportunities for those in the region.
“Where businesses are expecting changes in the months ahead, it’s increasingly important that they plan accordingly and manage their cash flow and working capital carefully to ensure they have the financial flexibility to respond to any threats or opportunities around the corner.”
Hann-Ju Ho, senior economist for Lloyds Bank Commercial Banking, said: “The fact that economic optimism rose across the UK as a whole this month illustrates a slightly more positive view on the balance of risks for the country’s economy, despite the expected interest rate rise this year.
“It will be interesting to see if the overall business confidence measure shifts from its steady position towards the end of the year.”