Business confidence in Yorkshire rose 12 points during October to 52%, according to the latest Business Barometer from Lloyds Bank Commercial Banking.
Despite the uptick, companies in Yorkshire reported lower confidence in their own business prospects month-on-month, down one point at 46%. When taken alongside their optimism in the economy, up 21 points to 58%, this gives a headline confidence reading of 52%.
Yorkshire businesses identified their top target areas for growth in the next six months as evolving their offer (41%), investing in their team (38%), and investing in sustainability (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 41% of businesses in the region expect to increase staff levels over the next year, up two points on last month.
National picture
Overall UK business confidence rose three points in October from 36% to 39%, and firms’ outlook on the overall UK economy increased four points to 34%. Businesses’ confidence in their own trading prospects also continued the upward trend, rising four points to 45%.
Companies’ hiring intentions reached their highest level since May last year, with 32% of firms intending to increase staff levels over the next 12 months, up six points month-on-month.
Firms in the South West reported the biggest uptick in business confidence, increasing 26 points month-on-month to 47%.
Following a fall in confidence in September, the retail and service industries both saw an increase in business confidence, with retail business confidence increasing by five points to 37% and services rising seven points to 43%.
Levels are still lower than seen in August, however, when retail business confidence was at 44% and services at 42%. Manufacturing confidence was 36%, unchanged from last month when confidence rose to a three-month high. Construction fell for a second month in a row to 31% (down five points).
Steve Harris, regional director for Yorkshire at Lloyds Bank Commercial Banking, said: “The jump in optimism among Yorkshire businesses this month is testament to both their resilience and innovative thinking. Our region has one of the most diverse economies in the UK and that’s one of the reasons we’ve been able to weather the economic turbulence that has affected other areas of the country more adversely.
“The back end of September saw the Leeds Digital Festival, with this epitomising some of the innovation and high-growth businesses that are now supporting Yorkshire’s increased optimism and confidence.
“It’s fantastic to see firms investing in sustainability as a route to growth, which is important both regionally and nationally. We are increasingly supporting businesses with their sustainable investments and have recently been able to broaden our offering to finance renewable and transition technologies alongside the discounted financing that we already have available.”
Hann-Ju Ho, senior economist, Lloyds Bank Commercial Banking, said: “Business confidence this month reflects a more positive outlook as we head into the important festive period, with trading prospects and economic optimism both at their second highest levels this year.
“The level also underlines the wider upward trend of steadily rising confidence in 2023. If you look at the year in quarterly time periods, confidence has steadily risen from 20% in the first quarter, 26% in the second and in September an average of 27% in the third.
“However, our data shows that firms are still safeguarding their profit margins in response to the possibility of interest rates remaining high, wage increase pressures, and the prospect of higher energy prices again this winter.
“Therefore, businesses will be keeping a keen eye on the forthcoming Autumn Statement and Bank of England policy announcements as they navigate through a challenging economic period ahead.”
