8:30 AM 18th February 2021
Business Confidence In Y&H Weaker Than Any Other UK Region, New Survey Finds
Yorkshire and the Humber is the only region of the UK where business confidence remains in negative territory, a survey of chartered accountants has found.
"We want to see the Budget focus on providing a bridge to sustainable and resilient economic recovery, getting people back into work..."
ICAEW’s Business Confidence MonitorTM (BCM) for Q1 2021 found that business confidence in Yorkshire and the Humber was in negative territory, a contrast with the rest of the UK where business confidence was positive despite continued challenges.
Domestic sales fell by 2% year-on-year, comparable to the falls seen during the global financial crisis of 2008. Exports saw the biggest fall of any region at 2.5% year-on-year. This was the steepest decrease in Yorkshire and the Humber since the BCM began, with both sales and exports likely affected by pandemic containment measures and Brexit uncertainty.
In response to the drop in sales, businesses reduced their employee numbers by 2.3%, the largest fall in employment in any UK region. Profits were down 3.3%, compared to 3.1% nationally.
Regulation and late payments become growing challenges
When asked about the growing challenges their businesses faced, 45% of respondents said regulatory requirements, the highest proportion of any region. It is possible that the introduction of new customs and regulatory processes because of the end of the Brexit transition period were a reason for this, the ICAEW report said.
Just over a quarter of companies said late payments were a growing challenge, largely because of financial distress during the pandemic.
Optimism for the future
Companies expected the roll-out of coronavirus vaccines to bring a return to more normal business conditions in the UK, the report said.
Businesses forecast growth of 4.8% in domestic sales and 2.1% in exports, supported by a release of pent-up demand in the region’s manufacturing sector.
With these conditions, businesses in Yorkshire and the Humber expect profits to grow by 3.8% in the next year, while employee numbers are set for a 1.6% increase.
Dr James Callaghan, ICAEW Regional Director for Yorkshire and the Humber
Dr James Callaghan
“Yorkshire and the Humber is the only UK region where business confidence is negative, and our businesses have seen a fall in domestic sales and the biggest declines in exports and employment in the country.
“However, our businesses predict profits, sales and headcount will increase in the next year.
“We want to see the Budget focus on providing a bridge to sustainable and resilient economic recovery, getting people back into work, helping exporters, and greater investment in digital technology to make our businesses competitive in the 21st Century.”