Business confidence in Yorkshire rose 26 points during the beginning of June to 45%, according to the latest Business Barometer from Lloyds Bank Commercial Banking.
Companies in Yorkshire reported higher confidence in their own business prospects month-on-month, up 28 points at 48%. When taken alongside their optimism in the economy, up 25 points to 42%, this gives a headline confidence reading of 45%.
Yorkshire businesses identified their top target areas for growth in the next six months as entering new markets (45%), evolving their offering (39%) and investing in their team (30%). The Business Barometer, which surveys 1,200 businesses monthly, provides early signals about UK economic trends both regionally and nationwide. A net balance of 27% of businesses in the region expect to increase staff levels over the next year, up 24 points on last month.
Overall, UK business confidence increased by nine points to 37% in June, with all regions reporting a positive confidence reading. Eight out of 10 regions reported a higher confidence reading than in May.
The East Midlands reported the highest levels of business confidence at 52% (up 35 points on last month), the highest level of any UK region or nation this year. Scotland reported the second highest confidence reading at 50% (up 28 points month-on-month), followed by the North East at 47% (up 12 points month-on-month) and Yorkshire at 45% (up 26 points month-on-month). London and the South West were the only regions to report a decline in confidence. In London confidence fell by 10 points to 33%, while in the South West it fell by one point to 29%.
Business confidence for firms in the service sector rose to 37% (up 11 points), the highest seen since February 2022. With the recent spell of good weather and a reduction in food and energy prices, businesses in leisure and hospitality may be able reap the rewards in the months to come.
Manufacturing firms’ confidence also increased to its highest level since early 2022, rising to 50% (up 10 points) to outperform other sectors.
Steve Harris, regional director for Yorkshire at Lloyds Bank Commercial Banking, said: “The spike in business confidence we’ve seen this month is positive. While there are persistent headwinds with sticky inflation and a tight labour market, there is some respite for firms with softening fuel and energy costs.
“It’s great to see so many firms are optimistic about their growth prospects. Of course, working capital management is important for those going after new prospects. Having facilities in place to cope with rising prices and ensuring there is the financial headroom to go after new opportunities are both key to success.
“Those evolving their offering should also consider the environmental impact of any decisions they’re making and act with sustainability front of mind. Similarly, those seeking out new markets, particularly new geographical locations should consider how to carefully manage any risk.”
Hann-Ju Ho, Senior Economist, Lloyds Bank Commercial Banking, said: “It’s encouraging to see business confidence rebounding following last month’s five-point dip to 28%. Trading prospects and optimism have seen a resurgence this month with overall confidence up in all but two of the twelve regions of the UK, which shows positive prospects across the wider economy.
“However, interest rate rises, and cost pressures are still felt by many and we await to see the impact of the latest 50 basis point rise in the base rate. Meanwhile, expectations for average pay growth, although down slightly this month, appear to have picked up compared with the start of the year and remain elevated relative to pre-pandemic levels.”
