Business confidence in Yorkshire & the Humber fell two points during October to five per cent according to the latest Business Barometer from Lloyds Bank Commercial Banking.
Companies in the region report higher economic optimism, which rose three points to five per cent. but lower confidence in their trading prospects, which fell six points to six per cent. Together, this gives an overall confidence of five per cent.
But businesses’ hiring intentions took a knock with a net balance of -six per cent of businesses in the region expecting to hire more staff during the next year, down ten points on last month.
Across the UK, overall confidence rose four points to six per cent as firms’ confidence in their own prospects climbed two points to 15 per cent.
The Business Barometer questions 1,200 businesses monthly and provides early signals about UK economic trends both regionally and nationwide. This month’s survey was conducted before the government announced its new deal on the UK’s departure from the EU.
Kelly Green, regional director for Yorkshire & the Humber at Lloyds Bank Commercial Banking, said: “It’s good to see businesses remaining optimistic overall in their outlook. Confidence has generally held steady in the region, despite a marginal dip on the previous month.
“However, it will be important for companies reporting lower confidence in trading prospects to manage their working capital carefully, especially in the coming months – when many firms will be expecting seasonal spikes in demand.”
Across the region, a net balance of 12% of businesses said they felt that the UK’s exit from the European Union was having a negative impact on their expectations for business activity, down three points on a month ago.
Businesses in the West Midlands showed the most confidence, at 16 per cent, ahead of the South West at 15 per cent, and East Midlands, 13 per cent.
Those in Scotland were the least confident, with an overall confidence of -3 per cent, nine points below the national average.
Meanwhile, overall business confidence improved in all four broad sectors, with the largest increases being in the construction sector, which rose eight points to 18 per cent and the manufacturing sector, which increased seven points to five per cent.
Despite confidence in the services sector rising for the first time since June, by three points to 0 per cent, overall confidence remained the weakest in this sector, while confidence in the retail sector saw a small increase of one point to 15 per cent.
Hann-Ju Ho, senior economist, Lloyds Bank Commercial Banking, said: “Both business confidence and optimism about the wider economy have picked up this month, with economic optimism reaching a three month high as concerns about the impact of the UK leaving the EU eased. However, there was a slight step down in hiring intentions, which could reflect concerns about ongoing economic uncertainty.”