Yorkshire business confidence below national average as firms expect faster growth next year
BUSINESSES in Yorkshire and Humberside are feeling less confident than their UK counterparts, standing at +21.7 compared to the UK national average of +24.0.
That’s according to the latest ICAEW/Grant Thornton UK Business Confidence Monitor (BCM), which found that this quarter, the region’s businesses are reporting stable growth in their key financial performance indicators.
Turnover increased over the past year by 2.8% and sales volumes rose by 2.0%. This growth was driven by steady increases in domestic sales, at 2.1%, and exports, at 3.3%. In line with these figures, companies are forecasting financial performance to strengthen over the next year. Turnover is predicted to grow by 3.8% and sales volumes by 4.1%.
Chris Manners, ICAEW Yorkshire & Humberside regional director, said: “Despite remaining below the national average in the region, confidence itself has now stood in positive territory since Q2 2012 and is well up on the reading of +1.5 a year ago. While it is at a high level, and with the UK economy expected to grow by 1.0% this quarter, businesses need to make the most of the environment to ensure that the recovery is consolidated.”
Will Oxley, senior practice partner for the Leeds office of Grant Thornton, added: “From what we are seeing in the market, there is a definite change of mood as many companies are, at last, starting to believe that the improvement in operating conditions is here to stay. The business environment is steadying and businesses expect their financial performance to strengthen over the next year.
“However, capital investment growth remains weak, slowing to just 1% in Yorkshire and the Humber in the last 12 months. Government needs to maintain a stable environment where UK business can make longer term plans; and the economy can further benefit from the growing confidence we are seeing.”
Private sector job creation remained slow this quarter, as businesses reported increasing staffing levels by just 0.4% over the past 12 months.
However, faster increases in headcounts are predicted ahead, companies expecting to grow staff numbers by 1.7% over the next year. A sustained period of positive employment growth has not been reported in the region since Q3 2008, resulting in Yorkshire & Humberside having one of the highest unemployment rates in the UK at 8.9% during April to June 2013.
