BUSINESS confidence is improving but the Covid pandemic has cost many jobs and 'hollowed out' industries.

The latest economic report from the York & North Yorkshire Chamber of Commerce shows that people are feeling more positive, but the crisis is far from over and it highlights sectoral imbalances.

The Chamber quarterly economic survey of businesses was carried out as the second national lockdown started in November 2020.

It saw a manufacturing rebound following a very challenging year, with domestic and international sales up on the previous quarter for many.

The report suggests that improvements in manufacturing might be down to orders being brought forward or suppliers looking for more certainty by purchasing from UK companies ahead of the end of the EU transition period.

Across the service sector, restrictions have been especially damaging for the leisure, hospitality, accommodation and catering sectors which is reflected in this quarter’s results.

However, professional services, especially regulatory, compliance and essential business-to-business services, reported domestic sales, had improved on the previous two quarters.

Andrew Digwood, president of the York & North Yorkshire Chamber, said: “The Covid crisis has tested our business community to the limit and sadly we have seen many jobs lost and industries hollowed out across our region.

"Our city centres have seen significant downturn in footfall and our high streets are unlikely to return back to how we knew them before the crisis.

“Yet despite all of this I remain optimistic that our economy will recover and that there are some positive messages to take from the latest Chamber findings.

"Clearly we are not out of the woods yet, and the imposition of the latest lockdown is testament to this but the development and roll out of a vaccine will bring some comfort to many.”

Now in its 32nd year, this is the largest and longest running regional business survey.

Roger Marsh, chair of both the Leeds City Region Enterprise Partnership and NP11, said: “In the final quarter of 2020, there are signs of improvement in manufacturing where increasing sales have driven the sector back into growth territory for the first time since 2019.

"While economic activity still remains low, in both export and domestic activity, there are signs of recovery with both foreign and UK sales improving significantly from Q3.

“It is positive to see business confidence rise from the previous quarter alongside business investment which has returned to growth.

"Capital investment has grown in both the manufacturing and service sectors, however this positivity does contrast with the employment outlook with many businesses reporting a reduction in headcount in the last quarter.”