Business confidence in Yorkshire has dropped to the lowest level in the UK, while recruitment plans have fallen and pay rises stalled, but investment still looks set to improve, according to a report.
The latest Business in Britain report from Lloyds Bank shows that business confidence has dropped to 15 per cent compared with 23 per cent in July 2017. It was the lowest confidence level recorded of all 11 UK regions.
Business confidence is calculated as an average of respondents’ expected sales, orders and profits over the next six months, in the report.
The net balance of firms looking to hire more staff dropped by 13 points to one per cent, compared with July 2017.
The net balance of firms intending to increase pay over the next six months fell from 12 per cent to zero.
Despite reduced optimism, the net balance of firms looking to grow investment and capital expenditure in the next six months increased by five points to 15 per cent.
Steve Harris, regional director for Yorkshire at Lloyds Bank Commercial Banking, said: “It’s disappointing to see optimism falling to this degree among Yorkshire firms in comparison with the growing confidence seen in neighbouring regions.
“Concerns over the devolution deadlock, transport infrastructure investment and weaker domestic demand for goods and services may well have played a role in local businesses’ pessimistic outlook.
“While confidence has dropped from July, it’s still broadly in line with the sentiment felt this time last year.
“Encouragingly, Yorkshire firms remain stoic with their investment plans.”
Access to talent was again reported as a key challenge for the region’s firms.
The proportion of businesses reporting difficulties hiring skilled labour fell 10 points but remained relatively high at 38 per cent.
The North East is the most confident region in the UK, 38 per cent, followed by the North West, 31 per cent, the report found.
Weaker UK demand is now the single greatest risk to firms in Yorkshire in the next six months, cited by 20 per cent of firms in the region, up marginally from 19 per cent in July.