INFLATION has caused businesses to effectively dismantle plans for investment, research from West and North Yorkshire Chamber of Commerce has revealed.

The Chamber’s Quarterly Economic survey for the final three months of 2022 showed that significant challenges on costs, recruitment and the value of Sterling persisted to a significantly high degree among both service and manufacturing firms.

There is, however, cautious optimism among bosses that turnover and profit will begin to improve early in 2023,  following the low point that followed former Prime Minister Liz Truss’ mini-budget and the ensuing collapse in the markets.

The service sector bounced back to a more respectable level during the fourth quarter of 2022 and manufacturers saw an improved picture for their overseas sales, according to the research.

Cashflow for manufacturers in West and North Yorkshire is notably poorer than the rest of the country and employment and investment prospects remain weak in the area.

Amanda Beresford, chair of West & North Yorkshire Chamber of Commerce, said: “There is no getting away from the fact that 2022 finished on a challenging note for our region’s economy. After a year of grappling with increasing prices and difficulties on the supply side of doing business, firms in our region have had no option other than to get comfortable with being uncomfortable.

“While the impacts of the numerous difficulties our economy faces are still being felt keenly, we should take heed of the fact that there are numerous signs that business leaders here in Yorkshire are beginning to see indications of optimism on the horizon.

“Question marks remain over what happens when the energy price cap comes to an end in March and, as a Chamber, we will continue to press ministers on ensuring energy costs do not become unsustainable.”

Mark Roberts, Leeds City Region Enterprise Partnership Chair, said: “The final Quarterly Economic Survey of 2022 does present some positive ‘green shoots’ across the business base in West and North Yorkshire.

“However, there are still some key challenges that businesses are facing that are likely to linger into next year. Inflation is a key cost pressure across the entire business base, cited by 80 per cent of manufacturing firms and 79 per cent of service sector businesses.

“Whilst the two issues are linked, firms are significantly more concerned about inflation than interest rates, likely due to the more immediate impact which inflation is having on input prices.”

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