Yorkshire firms shelve recruitment plans as confidence slides

Business confidence across Yorkshire and the Humber dropped in July, according to new data.

The latest Business Barometer from Lloyds Bank Commercial Banking found that companies’ confidence in their prospects fell 25 percentage points in July to 16%

Similarly, firms’ economic optimism was down month on month by six points, at 22%.

The two figures, when merged together, gave Yorkshire businesses an overall confidence of 19% for July – 16 percentage points below June’s 35%.

Yorkshire and Humber companies are curbing recruitment plans for the year ahead as a result of the lowered confidence; a net balance of just 12% of businesses in the region expect to hire more staff during the next year, down 11% on June’s findings.

Across the UK as a whole, business confidence edged up by one percentage point to 30%, while optimism about the economy increased by 2% to reach 25%.

A net balance of 4% of Yorkshire firms said the UK’s exit from the European Union was having a negative impact on their business activity expectations. Comparatively, a net balance of 6% felt it would have a positive impact the month previous.

Steve Harris, regional director for Yorkshire at Lloyds Bank Commercial Banking, said: “With so much uncertainty, businesses are finding it difficult to accurately predict and plan for the future.

“It is difficult to pinpoint the causes for the disparity in Yorkshire confidence than that seen elsewhere.

“Despite the fact that exports from Yorkshire have grown in the past year, concerns about what a hard or no-deal Brexit may mean for the region, as well as the ongoing delays in devolution decisions together with a perceived lack of investment in transport could be dampening optimism towards future opportunities for those in the region.”

He continued: “Where businesses are expecting changes in the months ahead, it’s increasingly important that they plan accordingly and manage their cash flow and working capital carefully to ensure they have the financial flexibility to respond to any threats or opportunities around the corner.”

Lloyds’ Business Barometer questions 1,200 companies.