Business confidence in Yorkshire fell 11 points during May to 19%, according to the latest Business Barometer from Lloyds Bank Commercial Banking.
Companies in Yorkshire reported lower confidence in their own business prospects month-on-month, down 21 points at 20%. When taken alongside their optimism in the economy, down four points to 17%, this gives a headline confidence reading of 19%.
Yorkshire businesses identified their top target areas for growth in the next six months as evolving their offer (31%) investing in their teams (30%) and introducing new technology like AI (24%).The Business Barometer, which surveys 1,200 businesses monthly, provides early signals about UK economic trends both regionally and nationwide.A net balance of 3% of businesses in the region expect to reduce staff levels over the next year, down four points on last month.
Overall UK business confidence dropped five points to 28% in May. Despite the dip, every UK nation and region report a positive confidence reading.
As the country celebrated the Coronation, London reported the highest levels of business confidence at 43% (down four points on last month), followed by the North East at 35% (down six points month-on-month). The West Midlands, South East and South West, also reported high readings in May, all at 30%.
Firms remain optimistic about their own trading prospects, with a net balance of 34% expecting business activity to increase over the next 12 months, down just five points on last month.
Steve Harris, regional director for Yorkshire at Lloyds Bank Commercial Banking, said: “Despite there being a slight dip in overall business confidence for the region this month, it’s encouraging to see that Yorkshire firms remain broadly optimistic and are looking at evolving their offer as an avenue for growth.
“To avoid any delays and to capitalise on opportunities quickly, businesses should ensure they have the working capital to help with short-term finance needs. We’ll be by the side of businesses as they target growth in the coming months.”
Confidence among manufacturers increased to a one-year high of 40% (up from 29%), while retail registered a more modest two point rise to 26%, and construction remained robust at 34% despite its monthly nine point decline. Services confidence, however, fell back to 26% from 36%, almost erasing last month’s rise. Overall, confidence across the broad sectors remains above levels at the start of the year.
Hann-Ju Ho, senior economist for Lloyds Bank Commercial Banking, said: “As the economic environment remains challenging, compounded by stubborn inflation and higher wage pressures, business confidence has dipped slightly this month as firms feel cautious about the wider economy and their own trading prospects.
“However, while firms’ trading prospects and economic optimism both eased back, they still remain in positive territory as the UK has avoided an outright contraction in GDP – indicating a certain amount of underlying resilience in the economy.”
