Business confidence in Yorkshire fell seven points to 27% in June, 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 10 points to 34%. When taken alongside their optimism in the economy overall, down three points to 21%, this gives a headline confidence reading of 27%.
Yorkshire businesses flagged a range of growth opportunities for the next six months, including investing in their team (41%), evolving their offering (36%), and diversifying into new markets (32%).
The Business Barometer, which questions 1,200 businesses monthly, provides early signals about UK economic trends both regionally and nationwide.
A net balance of 40% of businesses in the region expect to increase staffing levels over the next year, up ten points on last month.
Across the UK, business confidence fell 10 points during June to 28%. Firms’ optimism in the economy dropped 12 points to 21%, while their outlook on their future trading prospects was down eight points, at 34%. The net balance of businesses planning to create new jobs also decreased, by nine points, to 28%.
Every UK region and nation reported positive confidence readings in June. However, all except the East of England (up 17 points to 31%) recorded a lower reading than last month. London (down 28 points to 35%), the West Midlands (down 23 points to 30%) and Scotland (down 15 points to 27%) reported the largest decreases month-on-month, with the North West (down two points to 42%) now the most optimistic region overall.
Steve Harris, regional director for Yorkshire & the Humber at Lloyds Bank Commercial Banking, said: “The UK faces an unprecedented set of economic challenges as inflation, supply chain pressures and falling consumer confidence combine. Despite this, Yorkshire and the Humber businesses are showing remarkable levels of resilience and a clear determination to evolve and grow.
“Across the board, we see management teams focusing on long-term goals whilst working to shore up their working capital to allow them to jump on opportunities quickly. Now is the time for businesses to think carefully about their cashflow position to protect growth in times of economic turbulence.”
Confidence among businesses in the manufacturing and construction sectors fell, bringing them close to the UK all-sector average, at 32% and 30% respectively, reflecting lower optimism in the economy. Service sector confidence declined to its lowest in a year, at 25%, showing weaknesses in hospitality, though offset by stronger confidence in business services. Confidence in retail businesses edged up this month four points from 27% to 31%.
Hann-Ju Ho, senior economist, Lloyds Bank Commercial Banking, said: “Business confidence declined this month, suggesting that the momentum for growth is moderating. Firms remain broadly positive but face several challenges ahead, including concerns around higher costs and slowing demand. If these trends continue, businesses may have less scope to pass on higher costs to support their margins.”
