Business confidence in Yorkshire rose 22 points during February to 34% – 13 points higher than the UK average – 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 17 points at 37%. When taken alongside their optimism in the economy, up 29 points to 32%, this gives a headline confidence reading of 34%.
Yorkshire businesses identified their top target areas for growth in the next six months as evolving their offering (42%), hiring new employees or investing in training (38%), and diversifying into adjacent markets or exporting to new markets (36%).
The Business Barometer, which surveys 1,200 businesses monthly, provides early signals about UK economic trends both regionally and nationwide.A net balance of 41% of businesses in the region expect to increase staff levels over the next year, up 15 points on last month.
Overall UK business confidence decreased by just one point to 21% in February. Firms remained positive about their own trading prospects with a net balance of 31% expecting business activity to increase in the coming 12 months.
Firms also reported plans to create new jobs with 20% of businesses intending to make new hires over the next 12 months – up three points from January.
All UK regions and nations reported a positive confidence reading in February, with six areas reporting a month-on-month increase in confidence. Of those, the West Midlands (up 30 points to 48%) and Yorkshire and Humber saw the largest monthly increases.
Steve Harris, regional director for Yorkshire at Lloyds Bank Commercial Banking, said: “It’s fantastic to see business confidence in the region has risen again with firms reporting the highest levels of overall confidence since May last year.
“Economic headwinds persist, but it’s encouraging to see that businesses are showing resilience and going after ambitious growth plans to boost their own trading prospects. “We’ll continue to stand side by side with businesses as they focus on opportunities for growth over the coming months.”
Retail confidence bounced back, rising for the first time in three months to 21% (up 14 points), led by improvements in both trading prospects and economic optimism. However, business confidence fell in construction (down eight points to 19%) and services (down five points to 20%) although this remains higher than in the latter part of 2022.
Hann-Ju Ho, senior economist for Lloyds Bank Commercial Banking, said: “Business confidence has lost a little momentum this month, following the strong gains seen recently. Firms are feeling more cautious about the wider economy. However, confidence in their own trading prospects continues to strengthen, helped by tentative signs that wage and other cost pressures may be reducing.
“While inflation appears to be tapering, pressures on consumers will need to ease further to help make it a more stable environment for businesses to operate.”
