New research from West & North Yorkshire Chamber of Commerce shows that confidence among businesses in the region has rebounded significantly, with the expectation of significant improvements in turnover and profitability.
Data in the Chamber’s latest Quarterly Economic Survey for the first quarter of 2023 shows that the amount of companies expecting to grow their profits is now at a comparable level to that seen at the start of 2022, before the war in Ukraine.
Optimism among the manufacturing sector in particular is very strong, with the level of firms in the industry expecting to grow their profits during the coming months now higher than levels seen prior to the pandemic, having nearly doubled from the preceding quarter.
There was also positive news on employment, with both service and particularly manufacturers having taken on new staff since the start of the year. For the manufacturing sector, its employment figures are at a level not seen since the start of 2017.
However, there was more negative news on investment and some areas of sales, with inflation pushing these areas downwards from the previous quarter as overheads continue to soar.
While service sector firms saw a healthy 18 per cent rise in overseas sales, domestic activity was largely static or, in the case of manufacturers, down. The research was conducting prior to last month’s rise in inflation and subsequent interest rate hike. Order books do not look terribly strong across the board but are marginally higher than seen before the Mini Budget in September. Both service and manufacturing firms will now be looking anxiously to the next three months to see if improving economic forecasts begin to translate into improving sales.
One area business is not expecting to see an improvement in is prices. Just four per cent of firms expect costs to decrease in the coming months and the best most companies are hoping for is simply for prices to remain as they are.
Elsewhere, cashflow remains a mixed bag with manufacturers having rebounded from two quarters of decline while service sector firms reporting a marginal decrease, albeit not on the same level as seen last autumn.
