Two business surveys in the Yorkshire and Humber area have pointed to a mixed picture for the region’s economy.
The quarterly survey from the Hull and Hull Chamber of Commerce showed continuing low business confidence, with cashflow taking a hit in the last three months and firms making a corresponding cut in investment and training. The Chamber said there was some positivity about the prospects for the next 12 months, but many businesses were cutting costs to weather the current storm of higher wage and National Insurance costs.
Both domestic and export sales improved in the last quarter, the Chamber said, but employment figures fell further into negative territory and 22% fewer firms saying they were looking to invest in new plant or machinery.
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Chamber chief executive Dr Ian Kelly said: “Our survey results for the second quarter of 2025 show that businesses have been hunkering down to weather the storm of cost increases which came in the form of National Insurance tax hikes and the rise in the minimum wage rate. There is though, a slight air of optimism, in that the outlook for the next 12 months seems to be a bit rosier, with profit expectations increasing, turnover on the up and with fewer firms planning to increase their prices, but fears around competition persist.
“Much will depend on how the economy fares in the coming months, whether there are any more geo-political shocks around the world, what inflation does, and whether or not the Bank of England decides to cut interest rates again—and ultimately what the Chancellor does in the next Budget after the welfare reforms which were supposed to save £5bn were greatly watered down to get the Bill through the Commons in the face of a huge revolt from the Government’s own MPs.”
Meanwhile, the NatWest Regional Growth Tracker - which measures the output of the region’s manufacturing and service sectors - remained in negative territory but revealed stronger confidence across Yorkshire & Humber firms.
The survey pointed to a near stabilisation of both activity and new orders, as well as a softening of cost pressures. It rose to a score of 49.6 in June, up from 49.0 in May but still slightly below the 50 figure that denotes growth in the economy.
Malcolm Buchanan, chair of the NatWest Regional Board, said: “A further pick-up in business confidence is an indication of the resilient mindset of local business leaders. Having come through a challenging first half of the year, we’re now starting to see more stable operating conditions for local firms, with activity and orders steadying in June.
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“Another positive for firms is the cooling of input cost pressures, which has allowed them to be more flexible with price setting. Selling prices were raised at a markedly softer pace than we’ve seen in recent months during June, which will help support demand.
“We are still seeing cutbacks to workforces, although employment tends to be a lagging indicator, so the turnaround here may be on the horizon, particularly if the local economy can stick on an upward trajectory.”