Ahead of the Autumn Budget, Business Confidence In South Yorkshire Is On The Up But Investment Intentions Remain Stubbornly Low

Although business conditions in South Yorkshire are broadly moving in the right direction, with marginal improvements occurring in a number of key areas, there remains a prevailing sense of flatness that is still holding our economy back. This is as per the sobering findings of the region’s latest Quarterly Economic Survey (QES).

For context, the QES is the nation’s largest independent review of business sentiment. Led by the British Chambers of Commerce (BCC), it asks a series of standardised questions — that are repeated every three months — to monitor if there are any fluctuations, developing trends or other points of interest that help shed light on how the UK’s private sector is currently fairing.

Although it is compiled into a national dataset by the BCC, the Quarterly Economic Survey is carried out all over the country by local accredited chambers of commerce. In the case of South Yorkshire, this means that the respective networks for Doncaster, Sheffield and Barnsley & Rotherham conduct the poll together, and then share the results to ensure that the voice of our region’s business community is being heard loud and clear by those with the power to enact change on their behalf.

The fieldwork for the most recent survey took place between mid-August and mid-September and, in many respects, its findings were consistent with those of previous quarters. Respondents indicated that there has been a minor uptick in domestic growth (for the sixth consecutive quarter now), while cashflow positions strengthened as well. Meanwhile, workforce levels continued to increase — with only one in ten firms expecting them to decrease in the near future — and overall business confidence is also on the up.

Although this may seem like cause to be tentatively optimistic, it is worth noting that all of these gains are relatively slight and that economic conditions across South Yorkshire appear to be plateauing. More troublingly, this is also the second successive quarter that has seen a worsening of business investment intentions; a development that will only serve to impede our long-term growth as a region.

Commenting on the findings of their latest Quarterly Economic Survey, the respective Chief Execs of the three South Yorkshire Chambers issued the following joint statement:

“There are certainly grounds for cautious optimism when parsing these results, with the region’s export market being at its healthiest level since 2020 when we first began recording the relevant metrics for international sales and orders. Likewise, domestic growth, cashflow positions and the job market are all on an upwards trajectory as well, albeit a somewhat marginal one.  

“That being said, the region cannot afford to rest on its laurels here, especially when business investment intentions are continuing to weaken and have now reverted back to where they were at the end of 2023. This goes for investments in both training, as well as in plants & machinery.

“Any sluggishness we are observing here has doubtlessly been exacerbated by the long delay in getting to the Government’s first budget, as firms will understandably be wanting to see what direction that is heading in before they commit to any major new plans. Speaking of which, it is also worth noting that concerns over inflation and corporate taxation in particular have increased significantly this quarter, with the latter being at its highest recorded level to date.  

“Suffice it to say, the announcements from the upcoming budget are therefore going to be extremely important when it comes to either instilling or undermining the confidence that businesses have in our economy.”  

The South Yorkshire QES is sponsored by Clear Insurance Management and the South Yorkshire Mayoral Combined Authority (SYMCA).

South Yorkshire’s Mayor, Oliver Coppard, added: “I am pleased to see further evidence that our economy is growing and business confidence continues to increase. With this new Government’s first Budget just days away, I understand this is a crucial moment. Businesses here need economic stability and the right conditions for investment, both locally and nationally.

“We are already leading the way through investment in the region’s transport and skills training that can help stimulate growth. I am determined to work in partnership with local businesses and national government to create the bigger and better economy we need here in South Yorkshire."