Yorkshire leads the way in business confidence
YORKSHIRE firms are the most confident in the UK, according to the Institute of Chartered Accountants in England and Wales (ICAEW). Despite their regional counterparts falling into negative territory on the back of the slowdown in the housing market and the turmoil in the financial markets, Yorkshire business confidence remains markedly high.
Finance and accountancy professionals in the region recorded a score of +11.7 in the Q4 2007 after declining the last quarter to +7.1 from +17.0 in Q2 2007.
For the remainder of the UK business confidence declined for the second consecutive quarter to a two year low – dropping from +4.8 in the summer to -3.9 in the current quarter.
Firms in the North West, West Midlands, South East and South West are the most pessimistic, whilst Wales, the Northern region and the East Midlands also record a negative Confidence Index.
Chris Manners, ICAEW regional director for Yorkshire and Humber, said that strong confidence in the IT, business services and transport sectors was boosting optimism
“The good news is the perception of very robust underlying growth here in Yorkshire and Humber,” he said. “We are expecting higher turnover and profit growth in the next twelve months which are well above predictions of the rate of expansion for the UK as a whole – with the turnover driven by domestic rather than foreign demand.”
Mr Manners added that despite oil prices hovering close to the $100-a-barrel mark and the price of wheat, milk and vegetables rising sharply, the region's businesses were optimistic that input price inflation will retreat in the next 12 months.
Moreover, finance professional in Yorkshire were the most positive about government support for business with only 4% saying this had become more of a challenge compared to 11% nationwide.
However, in line with the rest of the country, Yorkshire firms said they planned to lower the rate of investment growth in the next 12 months to 2.3% from 3.3% in the past 12 months.
The rates of expansion of salaries, research & development budgets and staff training budgets are also expected to weaken through 2008, although payroll is seen increasing by a robust 3.3% – stronger than the 2% expected across the country as a whole.
The report found that overall firms employing up to nine employees were the most pessimistic in their outlook while those employing 250 were the most positive.
