Business Confidence In Yorkshire And Humber Still High, After COVID Had Severe Impact On Economy

Business confidence in Yorkshire and the Humber remains high after the coronavirus pandemic inflected ‘severe’ damage on the region, a report published today has found.

In a survey of members for chartered accountancy body ICAEW’s Business Confidence Monitor for Q4 2021, businesses in Yorkshire and the Humber said that sentiment was in firmly positive territory, although at a lower level than the peaks reached earlier this year.

The pandemic inflicted “severe” damage on businesses in Yorkshire and the Humber, the report said, but this was being reversed by rebounds in activity since restrictions eased.

Over the next year, the region’s firms expect staff numbers to grow by the highest rates of any UK nation or region.

Current high confidence in Yorkshire and the Humber is likely linked to rising sales and these are set to continue, though the quarter-on-quarter decline in sentiment overall could reflect growing recruitment challenges, ICAEW said.

Businesses in the region reported that both domestic sales and exports grew in the year to Q4, by 3.1% and 1.4% respectively, while domestic sales are forecast to grow at a record 6.6% year-on-year. Exports are also expected to grow.

Optimism strong but challenges continue

Four in 10 companies said that the availability of non-management skills was an increasing challenge, a likely reflection of bottlenecks as companies competed for new hires to meet demand after the pandemic. This has been a particular issue for the region’s manufacturing sector.

Transport issues were an issue for a third of companies, up from 16% in the same quarter of last year, a reflection of capacity problems and driver shortages, as well as post-Brexit arrangements.

Yorkshire and the Humber saw the biggest increase in input prices of any UK region or nation, at 3.9%, with firms planning to increase prices charged to customers by 2.5% accordingly.

Nationally business confidence weakened after hitting record-breaking levels in the previous two quarters. This fall in optimism likely reflected problems businesses have experienced, both at home and abroad, from rising costs, supply chain disruptions and recruitment challenges.