Monday, April 22, 2024

Yorkshire business confidence dips in February

Business confidence in Yorkshire and the Humber fell 13 points during February to 31%, according to the latest Business Barometer from Lloyds Bank Commercial Banking.

Companies in Yorkshire and the Humber reported lower confidence in their own business prospects month-on-month, down 17 points to 37%. When taken alongside their optimism in the economy, down nine points to 25%, this gives a headline confidence reading of 31% (vs. 44% in January).

However, a net balance of 39% of businesses in the region expected to increase staff levels over the next year, up 10 points on last month.

Yorkshire and the Humber businesses identified their top target areas for growth in the next six months as investing in their team (43%), introducing new technology (31%), and investing in environmental sustainability measures (27%).

The Business Barometer, which surveys 1,200 businesses monthly, provides early signals about UK economic trends both regionally and nationwide.

National picture 

Overall, UK business confidence dipped two points in February to 42%, driven by softening confidence from firms in both their own trading prospects (49% vs. 51% in January) and the wider economy (34% vs. 37% in January).

Companies’ hiring intentions increased to the highest level since May 2022, with 36% of firms intending to increase staff levels over the next 12 months, up three points on the month before.

Sector Insights

There was a mixed picture for sectors this month. Confidence fell in manufacturing (nine points to 40%) and construction (seven points to 38%) respectively, although results remain higher than the same time last year. In contrast, the dominant services sector was unchanged compared to January at 45%, exceeding all months of 2023 except for November. Retail confidence was broadly steady, dipping one point to 41%.

Steve Harris, regional director for Yorkshire and the Humber at Lloyds Bank Commercial Banking, said: “While business confidence fell slightly in February, this data paints a clear picture of a region looking ahead with optimism.

“It’s particularly good to see a growing number of businesses planning to hire. This shows firms are gearing up for future growth or are looking to staff newly secured contracts, and it’s a move that will benefit local communities and the regional economy, not just firms themselves.

“Meanwhile, it’s encouraging to see sustainability as a top business focus area. This aligns with Yorkshire and the Humber’s reputation as a national powerhouse for the UK’s green economy – reflected in the announcement of planning permission for a major new carbon capture project in East Yorkshire last week that promises the creation of thousands more jobs for the county.”

Hann-Ju Ho, Senior Economist, Lloyds Bank Commercial Banking, said: “This month’s data still reflects a positive mood among businesses despite a marginal fall in overall confidence. Firms appear to be upbeat about their prospects and the economy, supporting their positive staffing expectations.

“Looking at the sectors, there is a mixed picture. There was a slight fall in confidence reported in the manufacturing and construction sectors, while retail and services stood their ground – remaining unchanged compared to January’s figures. But despite the manufacturing and construction fall, businesses are still showing high levels of confidence.

“The split across the regions also provides reason to view the dip in confidence at the broader UK level cautiously. Six regions have reported an increase in confidence while the other six have reported a decrease. So, scratching the surface, we see a story that continues to show a more positive outlook for the year ahead.”

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