Business confidence in Yorkshire fell six points during August to 32%, 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 four points at 32%. When taken alongside their optimism in the economy, down seven points to 32%, this gives a headline confidence reading of 32%.
Yorkshire businesses identified their top target areas for growth in the next six months as investing in sustainability (35%), investing in their teams (32%) and introducing new technology (25%)
The Business Barometer, which surveys 1,200 businesses monthly, provides early signals about UK economic trends both regionally and nationwide. A net balance of 21% of businesses in the region expect to increase staff levels over the next year, the same reading as last month.
Overall UK business confidence increased to its highest level since February last year, jumping 10 points to 41% in August. All 11 regions and nations reported a positive business confidence reading in August, with nine regions and nations reporting a higher confidence reading month-on-month.
Optimism in the UK economy also increased in August by 16 points to 37%, and the number of businesses expecting an increase in their trading prospects rose by three points to 46%.
Businesses in London reported the highest levels of business confidence at 52% (up 20 points month-on-month), its strongest reading in 14 months. Firms in the South East reported the second highest reading at 47% (up 17 points month-on-month), followed by those in the South West at 46% (up 12 points month on month).
The construction, retail and service sectors all saw a rise in business confidence in August. Services gained 12 points to reach a 22-month high of 42%, while retail firms were up nine points to 44%, an 18-month high. Construction firms’ confidence also increased by 11 points to a four-month high of 42%. In contrast, manufacturing confidence fell for a second consecutive month with a 4-point decline to 30%, taking it to the lowest level since April 2023.
Steve Harris, regional director for Yorkshire at Lloyds Bank Commercial Banking, said: “Despite a small dip in confidence this month, it is encouraging to see that businesses remain resilient in their efforts to grow. It’s especially positive that sustainability is a big priority as this is not only critical to support the transition to Net Zero but we also know it can present significant financial opportunities for businesses.
“Firms looking to invest in improving their sustainability should take advantage of the discounted lending available for these projects and seek support where they need it to identify new avenues for green growth. As always, we’ll remain on hand to provide businesses with practical tools and support as they achieve their ambitions.”
Hann-Ju Ho, senior economist, Lloyds Bank Commercial Banking, said: “The bounce in economic optimism this month is the standout point. Our analysis shows that businesses felt relief that interest rates may be reaching their peak, alongside hopes that measures to tackle inflation are having an impact.
“With trading prospects remaining stable, and hiring and wage intentions also rising, the macro environment for small businesses and those outside the manufacturing sector is more upbeat.
“From the data, large firms and manufacturers are experiencing some degree of caution, which is likely to reflect the wider global economic environment and, for manufacturing, the rotation of spending towards services.”
