Business confidence and profit expectations have dipped slightly in Halifax following a drop in orders.
Information published by Mid Yorkshire Chamber of Commerce in its quarterly economic survey showed that while cash flow balances were at a four-year high, export sales and order levels generally were disappointing.
The chamber itself described the results as “mixed and subdued” despite UK sales and order balances being at levels last recorded in 2015.
Brexit uncertainty and the increasing costs of raw materials were attributed to the drop-off in overseas trading and one part of the report suggested that persistent weakness of sterling was now probably doing “more harm than good” when it came to trading internationally.
Employment expectations were steady at levels not seen for three years but more and more examples were being seen of capital investments being put on hold.
Appetite for investment in training was shown to be in decline, something that could be influenced by the fall-off in people taking up the Apprenticeship Levy which was introduced to the UK last year.
Mid Yorkshire Chamber’s head of policy, Steven Leigh, said: “Mid Yorkshire Chamber’s Quarterly Economic Survey (QES) for the third Quarter of 2018 has produced a mixed and subdued set of results which overall indicate that optimism is beginning to flag as we enter the final quarter of 2018.
“Despite the fact that UK sales relinquished the improvements reported in Q2, and orders dipped too, the figures remain at historically robust levels.
“Export sales and orders were disappointing, reverting back to 2017 levels.
“This is a reminder that export markets can quickly be affected by world events.
“Employment and employment expectation balances held steady at levels which were generally last reported back in 2015.
“Cashflow balances increased by 10 points to a four-year high balance of 15 per cent. Capital investments dried up this time (probably accounting for the good cashflow figures). Investments in training moderated slightly.
“Turnover and profit expectations have dipped somewhat, but in both cases the balances are generally at levels not much seen since 2014 and the figures point to a reasonable business outlook for the rest of the year.
“‘Other overheads’ with ‘fuel/utility’ costs are an increasing worry, raw material costs are an escalating concern for manufacturers, and exchange rates are the predominant worry for our manufacturing exporters.”
He added that he hoped that the upcoming budget would deliver decisive action to boost both productivity and growth as well as helping bolster stagnant business confidence levels which have blighted the UK for more than two years.
For manufacturers, raw material prices remained the top concern.
Sixty three per cent of people said they were worried about the prices of their inputs while fuel and utility costs also ranked highly.
Worries about pay settlements persist although concern about the cost of finance remains at a relatively low level.
The chamber did sound a positive note in terms of its outlook.
Businesses in the survey reported either “increased” or “remained constant” results for both turnover and profitability levels.