Business confidence in Yorkshire and the Humber rose one point during January to 29%, according to the latest Business Barometer from Lloyds.

Companies in Yorkshire and the Humber reported lower confidence in their own business prospects month-on-month, down eight points at 39%. When taken alongside their optimism in the economy, up nine points to 18%, this gives a headline confidence reading of 29% (vs. 28% in December 2024).

A net balance of 26% of businesses in the region also expect to increase staff levels over the next year, up one point on last month.

Looking ahead to the next six months, Yorkshire and the Humber businesses identified their top target areas for growth as investing in their team, for example through training (39%), introducing new technology, such as automation and AI (34%) and entering new markets (31%).

The Business Barometer, which surveys 1,200 businesses monthly and which has been running since 2002, provides early signals about UK economic trends both regionally and nationwide.

National picture

Overall, UK business confidence fell two points in January to 37%.

While firms’ optimism in their own trading prospects strengthened four points to 51%, their confidence in the wider economy dropped seven points to 24%.

For the third consecutive month, London was the most confident UK nation or region in January, climbing two points to 55%, followed by the West Midlands at 51%.

Sector Insights

There were similar falls in manufacturing, construction and retail this month, with a slight increase in services. Confidence fell to 38% in manufacturing (down 4 points), 36% in construction (down 5 points), and 40% in retail (down 3 points). However, confidence in services increased by 3 points to 38%. These results come within a general trend of larger confidence declines in retail and services in recent months. Within the services sector, confidence has notably fallen in hospitality but has remained more stable in business services and health-related services.

Martyn Kendrick, regional director for Yorkshire and the Humber at Lloyds, said:
“This represents a second month in a row of rising confidence in Yorkshire, and a good start to the year.

“As the region’s businesses press on with their plans for growth, we’ll continue to be by their side with our tailored support to help them make the most of new opportunities.”

Hann-Ju Ho, Senior Economist, Lloyds Commercial Banking, said:
“Changes in confidence can sometimes be sudden and sharp, but what we have seen recently has been a more gradual and measured decrease over time.

“The figures for trading prospects show promise with businesses signalling more resilience and assurance in their ability to weather perceived economic headwinds. The regional picture is similarly a cause for optimism, with seven regions reporting higher confidence, meaning it is the first time since July there has been more confidence rises than falls regionally.

“Elsewhere, the results for hiring prospects are in line with other trends from this month’s survey – dipping slightly by one point to 32%. Price expectations have fallen too, for the third month out of four."