Hiring plans boosted with sharp rise in business confidence

An increase in business confidence is reflected in growing recruitment plans among the region’s firms, new figures reveal.

According to the latest Business Barometer from Lloyds Bank Commercial Banking, companies’ hiring intentions show that a net balance of 23% of businesses in the region expect to hire more staff during the next year, up 15 points on last month.

The region’s firms report higher confidence in their business prospects at 41%, while their optimism in the economy remains broadly unchanged at 28%, from 29% a month ago.

Together, this gives an overall confidence of 3%, which is six points above last month’s figure of 29%.

Nationally, overall confidence has fallen six points to 29%, as firms’ optimism about the economy dips, weighing down their confidence in their own business prospects.

The Business Barometer questions 1,200 businesses monthly and provides early signals about UK economic trends both regionally and nationwide.

Kelly Green, regional director for Yorkshire and the Humber at Lloyds Bank Commercial Banking, said: “It’s encouraging to see business confidence and hiring intentions grow by this degree, especially in a month where rail travel disruption will have hindered many firms’ overall productivity.

“Confidence being above the UK average for the first time since March is also a positive sign for the region’s economy, and goes to show how resilient Yorkshire firms are.”

Across the region, a net balance of six per cent of businesses say they feel that the UK’s exit from the European Union is having a positive impact on their expectations for business activity. This is in contrast to the net balance of 11% that thought it would have a negative impact last month.

Meanwhile, a net balance of 53% of companies across Yorkshire expect the Bank of England to increase interest rates this year, with the average firm indicating that raising rates to 1.5% would have a significant negative impact on their business.

Yorkshire is among the most confident regions outside London this month. Overall confidence remains highest in the capital, at 40%, but is followed by Yorkshire, the North East and North West, all at 35%.

Businesses in the South East are least confident, with an overall confidence of 15%, 14 points below the national average.

Confidence is strongest among transport and communications services businesses, at 50% and 48% respectively, while construction rose five points to 45%.

Elsewhere, manufacturing firms report increased confidence at 35%, compared with 31% last month, but confidence among consumer firms has fallen 11 points to 29%. Confidence in business and finance stands at 25%, and at 22% in retail.

Commenting on the drop in confidence levels across the UK, Hann-Ju Ho, senior economist at Lloyds Bank Commercial Banking, said: “Increased global trade tensions and Brexit uncertainties are likely to have weighed on confidence, but it’s still near the long-term average and so there’s no need to hit the panic buttons.”