Businesses in Yorkshire are growing in confidence, with expectations on increasing profits, recruiting more staff and boosting sales all having risen in the past three months, West & North Yorkshire Chamber of Commerce has reported.

The Chamber’s latest Quarterly Economic Survey shows an improving picture on sales, hiring intent, investment and profitability during the first quarter of 2024.

After months of stagnation, overseas trade looks to be significantly picking up, with sales having been boosted from the start of the year and with close to half of all exporters reporting that their order books have improved.

However, the cost of labour continues to pose headaches for businesses and just over one in three firms surveyed said they were concerned about the impact the conflict in the Middle East would have on their business.

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Amanda Beresford, chair of West & North Yorkshire Chamber of Commerce, said: “Our latest Quarterly Economic Survey shows great levels of appetite to invest and take on staff, with outlook on profits and orders also showing a marked improvement. This is most welcome news, especially given that the previous QES had shown a more negative outlook.

“Clearly, much uncertainty persists. The levels of businesses concerned about the conflict in the Middle East remains high, as do worries over interest rates. While instability might be the new normal, we have the resilience and leadership here in Yorkshire to deliver a vibrant and bright economy that is able to create jobs, fuel investment and bolster profits.”

The survey showed an improvement in domestic sales activity, with 32 per cent of service sector firms and 26 per cent of manufacturers having grown their sales in Q1. Exports, too, showed a big improvement, with service firms boosting sales by 34 points and manufacturers showing a 46 per cent improvement in order books.

Firms across the region reported increasing hiring and improved prospects for taking on additional staffers in the coming months. Meanwhile the level of firms looking to invest has risen since the start of the year.

The cost of labour is now the top issue facing businesses, with 62 per cent of manufacturers and 60 per cent of services firms citing it as the chief cost pressure. Despite falls in inflation, the cost of doing business remains very high, with raw material costs and utilities continuing to be major issues. Interestingly, taxation has steadily crept up the league table of cost pressures, again most notably for service industries.

Finally, manufacturers reported a major increase in confidence of improved profitability during the next three months, up 25 points. Service sector firms are also upbeat, up four per cent on the same metric.