BUSINESS confidence remains high after the coronavirus pandemic inflicted ‘severe’ damage on the region, a report out today has found.

Businesses in Yorkshire and the Humber reported feeling positive but the sentiment was at a lower level than the peaks reached earlier this year.

The finding was revealed in a survey of members, for chartered accountancy body ICAEW’s Business Confidence Monitor, for the final quarter of 2021.

The report said the pandemic imposed 'severe' damage on businesses but this was being reversed by rebounds in activity since restrictions eased.

Over the next year, firms expect staff numbers to grow by the highest rates of any UK nation or region.

Current high confidence in Yorkshire and the Humber is likely to be linked to rising sales which are set to continue, but falling levels of optimism could reflect growing recruitment challenges.

Businesses reported that domestic sales and exports grew in the year to Q4, by 3.1 per cent and 1.4 per cent respectively, while domestic sales are forecast to grow at a record 6.6 per cent year-on-year. Exports are also expected to grow.

Four in 10 companies said the availability of non-management skills was an increasing challenge, a likely reflection of bottlenecks as companies competed to meet demand after the pandemic. This has been a particular issue for manufacturing.

Transport issues were an issue for a third of companies, up from 16 per cent in the same quarter of last year, a reflection of capacity problems and driver shortages, as well as post-Brexit arrangements.

Yorkshire and the Humber saw the biggest rise in input prices of any UK region or nation, at 3.9 per cent, with firms planning to increase prices charged to customers by 2.5 per cent accordingly.

Dr James Callaghan, ICAEW regional director for Yorkshire and the Humber, said: "High levels of confidence from businesses in our region suggest a strong recovery into 2022, but this report also makes clear the damage that the pandemic inflicted on Yorkshire and the Humber.

“Businesses and people will be heartened by the outlook for the next 12 months, but with companies already facing an increase in national insurance, rising energy prices and the possibility of higher interest rates, it’s vital nothing else affects the recovery.”