Yorkshire Businesses Show Less Pessimistic Outlook In June
Lloyds Bank’s Business Barometer for June 2020 shows:
Overall confidence for firms in Yorkshire & the Humber rose eight points in the past month to -23%
Firms’ confidence in their own business prospects dipped one point to -22%
Just 4% of businesses expect to remain closed by the end of June
Business confidence in Yorkshire & the Humber rose eight points during June to -23% according to the latest Business Barometer from Lloyds Bank Commercial Banking.
Although companies in the region reported lower confidence in their own business prospects month-on-month at -22%, economic optimism climbed 14 points at -26%. Together, this gives a headline confidence reading of -23%, above the UK average of -30%, while making Yorkshire the second least pessimistic region in the UK.
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 of coronavirus on their business, almost half (48%) said they expect to be operating at more than 50% of capacity by the end of June, although 4% didn’t expect to be operating at all. A fifth (19%) said it would take three months until they were back to operating at pre-COVID-19 levels, with only 6% expecting it to take more than 12 months.
The majority of firms continued to see demand fall during June, though the picture improved month-on-month. While 63% experienced a fall in demand for their products and services, this was down six points on May. Meanwhile, 14% experienced an increase in demand, up two points on the month before.
Of the 69% of businesses reporting disruption to their supply chain during June, 28% expected the situation to improve within three months, with just 3% expecting it to take more than 12 months.
Paul Varley, regional director for Yorkshire & the Humber at Lloyds Bank Commercial Banking, said: “There are encouraging signs in June’s Barometer reading, with Yorkshire firms having one of the least pessimistic outlooks in the UK. The region has the smallest proportion of companies not operating and the highest percentage of firms working above half capacity – so it does indicate that business confidence is starting to pick up. With further easing of restrictions and social distancing measures, we hope that the region’s outlook continues to improve. We’ll be by the side of Yorkshire businesses as they plan ahead for the future.”
Across the UK, business confidence grew marginally month-on-month, rising three points to -30%. The West Midlands was the least pessimistic region at -18%, followed jointly by Yorkshire & the Humber and the North East at -23%. Scotland was the most pessimistic, with confidence dropping eight points month-on-month to -41%.
In June, the construction sector rebounded strongly, increasing 30 percentage points to -14%. The retail sector increased two points to -23% and manufacturing saw an improvement at -35%. These were the highest levels seen since March, however, other services fell to -36% largely reflecting the impact on the hospitality and education sectors.
Hann-Ju Ho, Senior Economist, Lloyds Bank Commercial Banking, said: “While the results suggest the economy may be starting to see some improvement, trading conditions remain difficult for most firms as the majority are still experiencing disruption to supply chains. Hopefully the recent Government announcement of further relaxation of restrictions and the slight easing of social distancing measures will enable more businesses to reach their capacity and resume their usual activities, which we would expect to be reflected in further improvements to optimism next month.”