Business confidence in Yorkshire rose one point in November to 3% according to the latest Business Barometer from Lloyds Bank Commercial Banking – the first time confidence has increased this quarter. The survey was conducted between 1st-15th November, before the Chancellor’s Autumn Statement announcement on Thursday the 17th November.
Companies in Yorkshire reported higher confidence in their own business prospects month-on-month, up seven points at 19%. When taken alongside their optimism in the economy, down three points to -12%, this gives a headline confidence reading of 3%.
Yorkshire businesses identified their top target areas for growth in the next six months as evolving their product or service offering (37%), investing in sustainability (29%), and growing their workforce (28%).
The Business Barometer, which questions 1,200 businesses monthly, provides early signals about UK economic trends both regionally and nationwide.
A net balance of 23% of businesses in the region expect to increase staff levels over the next year.
Overall UK business confidence fell five points during November, but remained positive at 10%. Firms’ outlook on their future trading prospects was down two points to 25%, and their optimism in the wider economy dropped four points to -2%. Despite a seven-point dip, UK businesses remained positive about hiring intentions with 14% of firms aiming to create new jobs in the next 12 months.
All UK regions and nations, apart from the South East, reported a positive confidence reading in November, with seven recording a month-on-month increase in confidence. Of those recording an increase in confidence, Scotland (up 19 points to 24%), Wales (up 12 points to 17%) and the South West (up nine points to 5%) saw the largest monthly changes, with Scotland now the most optimistic overall.
Steve Harris, regional director for Yorkshire at Lloyds Bank Commercial Banking, said: “Yorkshire firms have not been immune to recent issues, and have faced a particularly challenging few months with rising costs and wide turbulence in the economy. Despite this, it’s good to see businesses remaining optimistic about their own trading prospects as we head into one of the busiest periods of the year.
“In the current economic environment, keeping margins on tight reins while closely monitoring cashflow will allow firms to plan ahead and carefully consider which opportunities they capitalise on.”
Business confidence in retail increased to 15% (up from 9%), perhaps reflecting a renewed confidence in trading prospects ahead of the festive season. However, business confidence in the manufacturing sector fell for the sixth month in a row, to 4%, down 9 points, the lowest confidence level since early 2021.
The construction sector held gains made in October, remaining unchanged at 20%, although this level still remains weaker than in the first half of the year.
Hann-Ju Ho, Senior Economist, Lloyds Bank Commercial Banking, said: “Given the recent political and economic landscape, it comes as little surprise that economic optimism and business confidence have fallen this month. Pay growth expectations remain high by historical standards, which could signal ongoing difficulties ahead for businesses to fill vacancies.
“Looking ahead, it will be interesting to see if the clearer policy picture provided by the Autumn Statement will lead to business confidence moving in a more positive direction as we go into 2023.”
