Yorkshire Businesses Target Growth As Confidence Dips
Business confidence in Yorkshire fell 13 points during July to 14%, according to the latest Business Barometer from Lloyds Bank Commercial Banking.
Companies in the region reported lower confidence in their own business prospects month-on-month, down 13 points to 21%. When taken alongside their optimism in the economy, down 15 points to 6%, this gives a headline confidence reading of 14%.
The ongoing economic turbulence is continuing to affect Yorkshire businesses of all sizes.
Despite another dip in confidence, Yorkshire firms identified their top target areas for growth in the next six months as evolving their product or service offering (37%), investing in sustainability (24%) and diversifying into new markets (24%). The Business Barometer, which questions 1,200 businesses monthly, provides early signals about UK economic trends both regionally and nationwide.
A net balance of 12% of businesses in the region expect to increase staff levels over the next year, down 28 points on last month – the biggest drop of any UK region or nation.
Overall UK business confidence fell three points during July to 25%. Firms’ outlook on their future trading prospects was up, three points to 37%, but their optimism in the wider economy dropped nine points to 12%. The net balance of businesses planning to create new jobs also decreased, seven points to 21%.
Every UK region and nation reported a positive confidence reading in July, with four out of 11 recording a higher reading than last month. The East of England (up 15 points to 46%), West Midlands (up eight points to 38%) and Wales (up seven points to 30%) saw the biggest increases month-on-month, with the East of England now the most optimistic region overall.
Steve Harris, regional director for Yorkshire at Lloyds Bank Commercial Banking, said:
“The ongoing economic turbulence is continuing to affect Yorkshire businesses of all sizes. But despite a fourth consecutive monthly dip, it’s encouraging that firms’ confidence remains in positive territory and that their focus is still on finding opportunities to grow.
“It’s particularly encouraging to see that a quarter of businesses are looking to invest in sustainability. We know that the green pound is more valuable than ever, and that customers are willing to spend more with brands that demonstrate strong environmental credentials. Not only is it good for the planet, but it will be good for firms’ prospects as they navigate the challenges of the coming months.”
Hann-Ju Ho, Senior Economist Lloyds Bank Commercial Banking, said:
“Business confidence declined this month, suggesting that economic headwinds are becoming more forceful. Despite this, firms’ assessment of their own trading prospects showed some resilience in the face of a challenging environment. Meanwhile, price pressures have shown no clear signs of a downward trend and there appears little sign yet that wage pressures are abating.”
Business confidence declined across all four of the sectors in July, reflecting lower optimism about the economy. Confidence within manufacturing declined the most this month (20%/-12), with firms citing moderating trading prospects and a notable drop in economic optimism, but also issues with inflation and supply bottlenecks. There were small falls in confidence for construction (28%/-2), retail (25%/-6) and services (24%/-1).