Business confidence starts to return to the region
Following the most challenging year for the economy in peacetime, regional businesses are starting to see a way out of the current crisis as confidence returns. Firms reported a significant uplift in outlook for the next twelve months with many expecting to increase turnover and profitability. The regional business survey (Quarterly Economic Survey) was conducted by Chambers of Commerce in West & North Yorkshire and Mid-Yorkshire in March; now in its 32nd year it remains the largest and longest running survey and has accurately predicted trends in business sentiment over that period. Whilst the longer term outlook shows positivity returning, there remains some shorter term challenges with sales activity impacted by restrictions and the fallout from Brexit. The survey also showed a great deal of sectoral imbalances, with professional services and those in digital reporting stronger sales activities whilst those in accommodation, catering and hospitality still struggling with the impact of lockdown 3.
Speaking on the results, Nick Garthwaite, chair of West & North Yorkshire Chamber, said, “Results this quarter suggest that companies are preparing for the future and confidence is beginning to grow. Recruitment activities appear to be increasing and investment plans starting to be reviewed. There are still challenges ahead, we need to see infection rates continuing to fall and vaccine roll out getting to all parts of our communities. Help is also needed to get firms ready for new trade procedures with the EU; the first quarter is proving to be very difficult for businesses as they adjust to new paperwork and customs checks. Costs of doing business continue to rise for our manufacturers and companies are struggling not to pass these on to their customers; expect some inflationary pressures during 2021.”
Mid Yorkshire Chamber of Commerce Managing Director Martin Hathaway said, “Despite difficult circumstances, we are starting to see the light at the end of the tunnel. The announcements of both the roadmap out of lockdown and the Chancellor’s Spring Budget should instil confidence in businesses in the mid Yorkshire region and beyond that we are working towards a brighter future.
“Here in Yorkshire, we are seeing recruitment improving, confidence growing, and investment plans being made, local businesses should draw great optimism from that.
“However, businesses are still facing challenges with trading arrangements following the UK’s departure from the EU, with manufacturing export sales levelling off and expectations of price rises in this sector.
“While the economic climate is nowhere near ideal, I am confident that we can recover from this together in the coming months.”
Roger Marsh OBE DL, Chair, Leeds City Region Enterprise Partnership and Chair, NP11 said, “Despite the lockdown at the start of 2021 there are signs of optimism among the region’s businesses in the first quarter of the year. Domestic sales have increased compared to Q4, and business confidence for the year ahead is rising.
“It’s positive to see businesses looking to recruit and expand their workforce at a faster pace than we have seen in recent months, investment in capital equipment is also increasing. “Whilst this is positive, there some challenges remain. Export sales and orders were both impacted as the trading arrangements with the EU changed. Consumer-facing companies have also responded less positively to the QES than other sectors. This is thought to be linked to the impact of restrictions on these businesses.
“The challenges faced by many businesses emphasise the need to remain vigilant, and do all we can to ensure the vaccine rollout and other measures to suppress the virus are as effective as possible to enable our region to build back better from the pandemic.”
