Yorkshire Times
Voice of the North
6:12 AM 28th July 2020

Re-opening Of Local Economy Fails To Lift Yorkshire Business Confidence

Business confidence in Yorkshire & the Humber rose two points during July to -21%, according to the latest Business Barometer from Lloyds Bank Commercial Banking.

Companies’ confidence in their own business prospects was unchanged month-on-month at -22. When taken alongside their views of the economy overall, this gives a headline confidence reading of -21%.

Lloyds Bank’s Business Barometer for July 2020 shows:

Overall confidence of Yorkshire firms rose two points in the past month to -21%
Firms’ confidence in their own business prospects was unchanged month-on-month at -22%
37% of Yorkshire firms aren’t currently using the furlough scheme

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

When asked about the impact COVID-19 was having on their business, the majority of firms continued to see demand negatively affected during July, but with the picture slightly worsening month-on-month. 67% experienced a fall in demand for their products and services, up four points on the month before. Meanwhile, just 12% experienced an increase in demand, down two points on June.

Almost two in five (37%) Yorkshire firms surveyed said they weren’t currently using the job retention scheme.

When asked about social distancing measures, three in five (60%) businesses said they could, in theory, operate at full capacity while remaining COVID-secure, although 29% said they couldn’t operate fully within the rules.

With 56% of Yorkshire businesses reporting disruption to their supply chain during July, 42% expected the situation to improve within six months, with no firms expecting it to take longer than 12 months.

Paul Varley
Paul Varley
Paul Varley, regional director for Yorkshire & the Humber at Lloyds Bank Commercial Banking, said: “It’s still too early for the reopening of sectors like retail and hospitality to have had a noticeable impact on the Yorkshire economy and along with it, business confidence. Firms across the board remain challenged by supply chain disruption, headcount worries and weakened demand – dampening their overall outlook.

“There’s a long way to go on the road to recovery, but one encouraging sign is that the North East has edged very close to a return to optimism this month. As businesses continue to re-open and pick up pace post-lockdown, we can hope for a similar picture to emerge here in Yorkshire too.”

National overview

At national level, UK business confidence increased eight points to -22% during July. The North East was the most confident region at -3% followed by the West Midlands (-7%) and the North West (-15%). Wales and Scotland were the least confident with -31% and -37% respectively.

In July, the retail sector increased 11 points to -12%, manufacturing increased 14 points to -21% and services rose 10 points to -26%. However, construction fell eight points to -22% after last month’s strong increase of 30 percentage points.

Hann-Ju Ho
Hann-Ju Ho
Hann-Ju Ho, Senior Economist, Lloyds Bank Commercial Banking, said: “While the results suggest the economy is starting to see some improvement, economic confidence still remains in deep negative territory. The Government announcement of the slight easing of social distancing measures has now enabled over half of businesses to reach their capacity and resume their usual activities. However, how businesses will continue to respond to the Job Retention Scheme will be key in the coming months.”