Yorkshire business confidence holds firm in May

Business confidence in Yorkshire and The Humber held firm in May while economic optimism edged higher, according to the latest Business Barometer from Lloyds Bank Commercial Banking.
Companies in the region reported higher economic optimism at 29% but confidence in their own business prospects fell slightly to 28%. Together, this gives an overall confidence of 29%, unchanged from last month.
Nationally, overall confidence climbed three points to 35%, as firms’ confidence in their own business outlook rose even though their optimism about the economy slipped. The Business Barometer questions 1,200 businesses monthly and provides early signals about UK economic trends both regionally and nationwide.
Steve Harris, regional director for Yorkshire and The Humber at Lloyds Bank Commercial Banking, said: “Optimism holding strong despite continued uncertainty is a good sign of resilience by the region’s firms.
“With the Summer holiday months fast approaching, there’s plenty to be confident about in Yorkshire’s tourism sector. But firms must manage their cashflow and working capital carefully to ensure they have the flexibility to respond to higher demand.”
Across the region, a net balance of 8% of firms expect to hire new staff this year, a fall of 13 points compared with last month. Meanwhile, a net balance of 11% of businesses say they now feel that the UK’s exit from the European Union is having a negative impact on their expectations for business activity. Last month, 8% of Yorkshire businesses thought it would have a positive impact on their organisation.

Overall confidence was highest among businesses in the West Midlands, at 58%, followed by London (52%) and the South West (41%). Businesses in the East of England were least confident, with an overall confidence of 13%, 22 points below the national average.

Confidence was strongest in the communications sector, at 50%. Transport and business and finance were the next most confident, at 43%, although that level represented a fall in both sectors. Retail confidence bounced back strongly as the weather improved in May, rising 23 points to 38%, although manufacturing fell seven points to 33%. The weakest confidence was in the mainly public sector at 21%.
Hann-Ju Ho, senior economist at Lloyds Bank Commercial Banking, said: “Business confidence is rising across the UK and most firms appear to be brushing off the economic slowdown in the first quarter, with national levels hitting a four-month peak in May.