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Yorkshire Times
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2:18 AM 29th May 2020
business

Yorkshire Business Confidence Falls To Near-record Low

 
Companies in the region reported lower confidence in their own business prospects month-on-month at -21%. When taken alongside their views of the economy overall, this gives a headline confidence reading of -31%.

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

In an illustration of the impact COVID-19 is having on the region’s business, the majority of firms continued to see demand negatively affected during May, but with the picture improving month on month. 69% experienced a fall in demand for their products and services, down seven points on the month before. Meanwhile, 12% experienced an increase in demand, up one point on April.

The number of firms in the region operating at less than 50% capacity increased 15 points to 64%. One in 10 (8%) said they weren’t operating at all, down from 24% in April.

Of the 73% of businesses reporting disruption to their supply chain during May, 31% expected the situation to improve within three months, while 4% expected it would take more than 12 months to return to normal levels.

Paul Varley, regional director for Yorkshire & the Humber at Lloyds Bank Commercial Banking, said: “Yorkshire firms are gripped by the challenges COVID-19 is posing, and are increasingly concerned about their trading prospects and the wider economy.

“But there are encouraging signs here. Yorkshire had highest number of operational businesses of all regions in the UK during May, with the latest figures indicating that closed firms are beginning to reopen. As this happens, supply chain disruption will be curbed and demand stimulated for goods and services.

“We’re committed to helping firms across all sectors to weather this difficult period.”

National overview

Across the UK, business confidence held steady month-on-month, dipping just one point to -33%. The North East and London both saw confidence rise month-on-month, scoring the joint-highest confidence reading at -20%. The South West recorded lowest confidence at -51%, compared to -35% the month prior.

National sector summary

From a regional perspective, despite all being in negative sentiment, six of the 12 regions reported a higher confidence in May. The North East was the least negative region at -20%. The South West was the most negative region at -51% followed by the South East at -45%.

In May, the construction sector saw the sharpest decline, falling 24 percentage points to -44%. However, all the three other major sectors saw a modest increase. The retail sector increased eight points to -25%, while manufacturing rose to -27% and services saw a small increase of four points to -18%.

Hann-Ju Ho, Senior Economist, Lloyds Bank Commercial Banking, said: “Despite the results partly capturing the period since the Government’s announcement of an initial easing of restrictions, trading conditions remain difficult for most firms. Nevertheless, a further relaxation of constraints will enable more businesses to resume their activities.”