ONGOING restrictions and the fallout from Brexit continue to hurt but local businesses are starting to feel more optimistic.

A regional survey has highlighted that the business community is starting to see a way out of the current crisis as confidence returns.

Firms reported a significant uplift in outlook for the next 12 months with many expecting to increase turnover and profitability.

The survey was conducted by the West & North Yorkshire Chamber of Commerce in March.

In its 32nd year it remains the largest and longest running survey, and has accurately predicted trends in business sentiment over those years.

While 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 imbalances, with professional services and those in digital reporting stronger sales activities while those in accommodation, catering and hospitality are still struggling with the impact of lockdown 3.

Andrew Digwood, president of York & 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.

“In our region in particular we also recognise the extremely difficult year that the hospitality, leisure and retail sectors have faced.

"They, and we, hope for a strong summer performance as restrictions (hopefully) continue to lift across the UK, and more people take domestic holidays to replace any shortfall created by continuing limitations on international travel.”

Roger Marsh, chair, Leeds City Region Enterprise Partnership, 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.”