'Long way to go on road to recovery'…

'Long way to go on road to recovery' for Yorkshire businesses

BUSINESS confidence in Yorkshire and the Humber is still in the red as firms react to the impact of the Covid-19 pandemic.

The latest Business Barometer from Lloyds Bank Commercial Banking shows companies’ confidence in their own business prospects was unchanged month-on-month at -22 per cent.

When taken alongside their views of the economy overall, this gives a headline confidence reading of -21 per cent.

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

When asked about the impact Covid-19 was having on their business, the majority of firms continued to see demand negatively affected during July, but with the picture slightly worsening month-on-month.

Sixty seven per cent experienced a fall in demand for their products and services, up four points on the month before. Meanwhile, just 12 per cent experienced an increase in demand, down two points on June.

Almost two in five (37 per cent) Yorkshire firms surveyed said they weren’t currently using the job retention scheme.

When asked about social distancing measures, three in five (60 per cent) businesses said they could, in theory, operate at full capacity while remaining Covid-secure, but 29 per cent said they couldn’t operate fully within the rules.

With 56 per cent of Yorkshire businesses reporting disruption to their supply chain during July, 42 per cent expected the situation to improve within six months, with no firms expecting it to take longer than 12 months.

Paul Varley, regional director for Yorkshire & the Humber at Lloyds Bank Commercial Banking, said: “It’s still too early for the reopening of sectors like retail and hospitality to have had a noticeable impact on the Yorkshire economy and along with it, business confidence. Firms across the board remain challenged by supply chain disruption, headcount worries and weakened demand – dampening their overall outlook. There’s a long way to go on the road to recovery, but one encouraging sign is that the North East has edged very close to a return to optimism this month. As businesses continue to re-open and pick up pace post-lockdown, we can hope for a similar picture to emerge here in Yorkshire too.”

At national level, UK business confidence increased eight points to -22 per cent during July. The North East was the most confident region at -3 per cent followed by the West Midlands (-7 per cent) and the North West (-15 per cent). Wales and Scotland were the least confident with -31 per cent and -37 percent respectively. In July, the retail sector increased 11 points to -12 per cent, manufacturing increased 14 points to -21 per cent and services rose 10 points to -26 per cent. Construction fell eight points to -22 per cent after last month’s strong increase of 30 percentage points.