Yorkshire saw business confidence rise during first half of 2017

Business confidence throughout Yorkshire has been on the rise in the last six months, according to the Business in Britain report from Lloyds Bank.

The confidence index – an average of respondents’ expected sales, orders and profits over the next six months – increased to 23%, from January’s score of 17%.

However, the index remained slightly lower from its score following the EU referendum vote (27%).

The Business in Britain report gathers the views of more than 1,500 UK companies, predominantly SMEs, and tracks the overall “balance” of opinion on a range of performance and confidence measures.

The business community in Yorkshire is feeling optimistic compared with London, the East Midlands and West Midlands, but falls behind neighbours, the North East and North West in terms of confidence.

The confidence index calculates the ‘net balance’ - the difference the percentage of firms that are positive in outlook against those that are negative. It can vary between -100 if all firms are negative and 100 if all firms are positive, 0 is neutral.

Leigh Taylor, regional area director for SME, Lloyds Banking Group, said: “Overall confidence in Yorkshire has increased since our last survey in January, but remains lower than that seen in our report last September.

“Despite this, the fact that confidence is rising in the current climate is a positive sign for the region.”

Overall, the share of Yorkshire firms naming political uncertainty as potential threats fell to 11% from 18% in January, while those citing weaker UK demand rose to 19% from 9% at the start of the year.

The proportion of Yorkshire firms that said that they had difficulty in recruiting skilled labour in the last six months, however, increased to 48%, compared with 30% in January.

Despite recruiting challenges, the net balance of firms expecting average pay to rise in the next six months fell to 12% from 16% suggesting companies are taking a cautious approach to hiring and pay.

Leigh added: “Despite hurdles in recruiting both skilled and unskilled labour, Yorkshire businesses also anticipate sales, profits, and staffing levels to rise.

“The outlook for the external environment remains mixed, with details of Britain’s exit from the EU still to come but businesses have been working within those parameters for a while now. For the moment, Yorkshire businesses are taking this in their stride until there is a clearer sense of what it will mean for them in the short and medium term.”

Yorkshire companies, however, were less positive about export prospects. The net balance of firms in the region expecting higher total exports in the next six months fell to 29% from 34%.

They were most confident about export prospects to North America followed by the Middle East (13%) and Latin America (10%). However, the share of firms expecting to increase exports to Asia Pacific remained the same.