Regional economy remains subdued
Economic activity across the region continues to battle the challenges presented by the global pandemic. The latest findings from the Quarterly Economic Survey carried out by West & North Yorkshire Chamber and Mid-Yorkshire Chamber in partnership with the Leeds City Region Enterprise Partnership highlighted the need for continued support as companies attempt to rebuild balance sheets. The report indicated that the pace of declining sales has started to slow both domestically and internationally and measures show some improvements from Q2. Looking forward the survey showed that Yorkshire manufacturers are more confident than their service sector counterparts and indeed more confident than most other regions in the UK. However, the regional Chambers remain concerned that measures to support businesses once the furlough scheme ends may not go far enough and are calling for targeted support to those sectors which have been unable to reopen sustainably.
Speaking of the results Nick Garthwaite, Chair of West & North Yorkshire Chamber said that, “Business conditions remain challenging for many across our region, with the manufacturing sector recording the strongest improvements in the quarter, while consumer-focused services firms, where social distancing restricts activity, saw more limited gains. The persistent weakness in cash flow is concerning as it leaves firms more vulnerable to external shocks, including further restrictions. This may also impact on how businesses prepare for future trading relations and border checks with their EU customer and supplier base.
“The furlough scheme, which has been a massive success in retaining jobs, closes at the end of October and whilst the Chancellor has responded positively to Chamber lobbying by extending COVID debt repayment and business rates holidays we feel more needs to be done to protect jobs. Increasing the Employer National Insurance threshold and expanding the Annual Investment Allowance could both help to reduce the overall costs for companies.”
Martin Hathaway, CEO of Mid-Yorkshire Chamber, added, “As fieldwork was being carried out, lockdown measures were eased, schools were opening their gates, and many businesses that had been working remotely were beginning to return to their workspaces and to a new ‘normal’.
“Despite the ongoing challenges, the region has shown true Yorkshire resilience over the last few months. Investment intentions for both plant and machinery and staff training remain historically low, but saw an increase in quarter three as more and more businesses adapt to new ways of working and take on new technology to aid them in doing so. These tentative signs of recovery are reflected in business confidence, which is slowly rising again in some sectors”.
Roger Marsh OBE DL, Chair of Leeds City Region Enterprise Partnership and NP11 group of northern LEPs said, “The COVID-19 pandemic has had an unprecedented economic impact on our region. In this quarter we can see that businesses are still feeling the reverberations of the economic downturn in quarter two. While economic activity remains low in quarter 3, in both export and domestic activity, there are signs of improvement from the previous quarter.
“It’s great to see business confidence close to pre-COVID levels in some areas of the economy – this speaks to the great resilience of our region as well as the hard work the Leeds City Region Enterprise Partnership, West Yorkshire Combined Authority and other partners have put in to support businesses through this difficult period.”
