Businesses in Yorkshire and the Humber are the most confident in the UK this month. Bucking the national trend, confidence among firms in the region rose five points to 23 per cent, according to the latest Business Barometer from Lloyds Bank Commercial Banking.
Yorkshire’s companies report higher confidence in their business prospects, up six points to 26 per cent, and greater economic optimism, which rose two points to 19 per cent. Together, this gives an overall confidence reading.
Businesses’ hiring intentions increased sharply in May, in line with their rising confidence. A net balance of 24 per cent of businesses in the region now expect to hire more staff during the next year, up 16 points on last month.
In Yorkshire and the Humber, a net balance of three per cent of businesses say they feel the UK’s exit from the European Union is having a positive impact on their expectations for business activity. Across the UK, a net balance of 21 per cent of firms say it is having a negative impact.
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 and the Humber at Lloyds Bank Commercial Banking, said: “In a month where the Tour de Yorkshire once again boosted the counties’ profile on the world stage, business confidence in the region hit a six-month high – topping the UK regions.
“This growth is excellent to see, particularly as a more optimistic outlook has coincided with a spike in hiring intentions, as firms look to create capacity to chase new opportunities.
“We’ve pledged to lend £1.4 bn to Yorkshire firms in 2019 to help them upscale, create jobs and ultimately to take advantage of promising trading prospects.”
The picture in Yorkshire defied the trend across the UK, where overall confidence slipped four points to 10 per cent. Firms’ confidence in their own prospects fell six points to 17 per cent, while their economic optimism dropped two points to two per cent.
The West Midlands is the second most confident UK region (21 per cent), followed by the East Midlands and Wales (both 19 per cent).
Those in the East of England are the least confident, with an overall confidence of minus six per cent, 16 points below the national average.
Hann-Ju Ho, Senior Economist, Lloyds Bank Commercial Banking, said: “Overall business confidence continues to sit below the long-term average. A slight dip in confidence this month appears largely to reflect companies’ assessment of their own trading prospects for the coming year, and the anticipated impact of the UK leaving the EU. It’s encouraging to note that while we are seeing uncertainty impacting business confidence overall, optimism regarding the wider economy remains broadly steady.”
Confidence rose among manufacturing businesses for the second consecutive month, up 5 points to a four-month high of 21per cent. The sector was the most confident in both trading prospects and economic optimism.
The services sector continued to report the weakest overall confidence (down 5 points to 7per cent), reflecting firms’ more negative economic optimism and the expected impact of the UK leaving the EU. Confidence also fell in construction (down 3 points to 12per cent) and retail (down 5 points to 11 per cent).