Business confidence drops but overseas growth expected

BUSINESS confidence in Yorkshire has fallen with economic uncertainty and weaker UK demand seen as the biggest threats to fortunes.

According to the latest Business in Britain report from Lloyds Bank, the confidence index, an average of respondents’ expected sales, orders and profits over the next six months, has declined by 19 points to 27% in Yorkshire since the previous survey in January.

The most commonly identified threat chosen by companies in Yorkshire over the next six months was economic uncertainty, which was cited by more than a third (34%) of firms, followed by weaker UK demand, which was mentioned by 23%.

This compares with the last Business in Britain survey which saw weaker UK demand identified by more than a third (35%) of Yorkshire businesses as the biggest threat.

The net balance of Yorkshire’s exporters expecting an increase in total exports across the globe increased by 11 points to 39%, reflecting the large increases in firms’ intentions to export to Europe, and both North and Latin America, compared with January’s report.

Exporters’ desire to continue selling to the US and Canada increased the sharpest (by 36 points) boosted by the fall in the value of sterling against the dollar.

Leigh Taylor, regional director for SME Banking in Yorkshire, Lloyds Bank Commercial Banking, said: “Business confidence in Yorkshire has taken a hit since January but this should be viewed in the context of the recent economic and political shocks.

“The EU referendum vote has introduced a level of uncertainty for companies across Yorkshire as the UK decides on the best model for its future relationship with the EU.

“That said, Yorkshire businesses are still looking to increase trade with Europe, bucking the trend taking place in other UK regions.”