Business confidence in Yorkshire rose 13 points during January to 48% – the highest of all UK regions and nations – according to the latest Business Barometer from Lloyds Bank.
Companies in Yorkshire reported higher confidence in their own business prospects month-on-month, up 16 points to 42%. When taken alongside their optimism in the economy, up 12 points to 55%, this gives a headline confidence reading of 48%.
The Business Barometer, which questions 1,200 businesses monthly, provides early signals about UK economic trends both regionally and nationwide.
A net balance of 29% of businesses in the region expect to increase staff levels over the next year, down by eight points on last month.
Overall UK business confidence remained steady in January, dropping just one point from December’s reading of 40% to 39%. Firms remained positive about their future trading prospects, despite a two-point dip month-on-month to 41%, and were optimistic about the economy overall, reporting a reading of 38%, up one point on December’s result. The net balance of businesses planning to create new jobs in the next twelve months decreased marginally by four points to 29%.
Every UK nation and region maintained a positive overall confidence reading in January, with four reporting a higher reading than last month. Along with Yorkshire, Scotland (up 13 points to 37%), the West Midlands (up nine points to 39%) and the South West (up eight points to 37%) all had stronger confidence readings month-on-month.
Steve Harris, regional director for Yorkshire at Lloyds Bank Commercial Banking, said: “These figures mark a fantastic start to the new year for Yorkshire firms. Despite ongoing inflationary challenges, coupled with market expectations, there are clear signs firms are confident about what coming months will bring.
“The resilience SMEs have shown throughout the pandemic has put them on positive footing. While there will inevitably be bumps on the road ahead as the UK continues its recovery, these latest findings give us cautious optimism that investment and growth will be defining features of the year ahead.”
Industry sector performance was mixed during January with confidence among manufacturers increasing by three points to 43%, reaching its highest level for three months due to an easing of supply chain pressures. Retail confidence also rose (up one point to 44%) while confidence among firms in IT/communications remains particularly strong at 72%.
The impact of Omicron over the festive period meant the service sector extended its recent run of modest decreases in January, dropping one point to 38%. Positively, hospitality has recovered some of December’s decline, rising from 6% to 38%.
Hann-Ju Ho, senior economist for Lloyds Bank Commercial Banking, said: ““January’s survey shows a continued resilience with minimal fluctuation as economic optimism remains at a historically strong level.
“A larger decline in confidence was potentially prevented by the reduction in Covid infection rates from early January and the prospects of the easing of restrictions across the UK.
“However, businesses remain cautious about the pandemic and are facing into challenges from rising cost pressures although many are raising their prices in response.”
