Business confidence in the Yorkshire & The Humber slid three points in April, but remains above the UK average, according to the latest Business Barometer from Lloyds Bank Commercial Banking.
Companies in Yorkshire report higher confidence in their business prospects, up four points to 20 per cent, but lower economic optimism, which has fallen eight points to 17 per cent. Together, this gives an overall confidence of 18 per cent, compared with a UK average of 14 per cent.
Businesses’ hiring intentions show a net balance of eight per cent of businesses in the region expect to hire more staff during the next year, down seven points on last month.
Across the UK, overall confidence climbed four points as both firms’ optimism about the economy and their confidence in their own prospects continued to climb from lows recorded earlier this year.
Companies’ economic optimism rose to four per cent, while their confidence in their own business prospects climbed three points to 23 per cent.
The Business Barometer questions 1,200 businesses monthly and provides early signals about UK economic trends both regionally and nationwide.
Kelly Green, regional director for Yorkshire at Lloyds Bank Commercial Banking, said: “It’s very positive to see Yorkshire firms increasingly confident about their trading prospects, but perhaps surprising to see this isn’t reflected in their hiring intentions.
“By carefully managing working capital, firms can build their financial flexibility to increase staffing and take advantage of growth opportunities without harming day-to-day spending.
“We’ve pledged to lend up to £1.4bn to Yorkshire firms in 2019, including through working capital tools, to help firms make the most of the opportunities that come their way.”
Across the region, a net balance of two per cent of businesses said they felt the UK’s exit from the European Union is having a negative impact on their expectations for business activity.
Businesses in the West Midlands showed the most confidence, at 28 per cent, ahead of the North West (20 per cent) and London (19 per cent).
Those in Wales are the least confident, with an overall confidence of minus one per cent, 15 points below the national average.
Across the UK, the overall confidence of firms in manufacturing, construction and services all improved – but retail sector confidence fell.
Manufacturing and construction confidence rose for the first time in three months, increasing six points to 16 per cent and two points to 15 per cent respectively. Services confidence increased by five points to 12%.
Meanwhile, the retail sector – which posted the highest confidence in March – fell this month by six points, placing it on a par with the manufacturing sector at 16 per cent.
Hann-Ju Ho, senior economist, Lloyds Bank Commercial Banking, said: “While business confidence remains low when viewed against the historic average, it is certainly encouraging to see an increase in overall optimism for the second month in a row.
“Firms appear more positive about both their own trading prospects and the broader economy, although their assessment of the potential impact of the UK leaving the EU remains unchanged. We will have to wait and see whether this partial rise converts into a sustained recovery.”