BUSINESS confidence is higher in this region than in any other part of the country, according to a new survey.

An index produced by the Institute of Chartered Accountants in England and Wales shows a confidence rating for Yorkshire and the Humber of 13.5 for the first quarter of this year.

As well as being the highest nationally, the figure is significantly up on the previous quarter's regional level of -30.9.

Exports growth is at a nine-year high in Yorkshire and the Humber and domestic sales are projected to rise.

Dr James Callaghan, the institute's regional director, says: "The recovery in business confidence in this region highlights that Yorkshire and the Humber companies feel more optimistic about prospects in the year ahead.

"A strong sales outlook appears to be a key driver. And while it’s also encouraging that labour market challenges and cost pressures seem to be easing, companies will be wary of the economy’s fragility, particularly given the reliance on our key manufacturing and chemicals sectors and nationwide concerns over high inflation and rising interest rates.

"To capitalise on the jump in confidence, the Government must fix the fundamental problems facing the economy with a plan to deliver long-term economic growth by injecting resilience and stability into the UK."

The latest survey showed that regulatory requirements posed some of the most widespread problems for companies.

Labour market challenges were at their lowest level in the region for nearly two years.

Around one in three firms reported that availability of non-management skills was a growing concern, while a quarter were increasingly troubled by staff turnover.

Tax burdens were a growing issue for one in four businesses.

And bank charges were a problem for 15 per cent of firms, which is above the average figure for the last decade.

Dr Callaghan adds: "Cost pressures persisted for businesses in Yorkshire and the Humber.

"Input cost inflation grew at a record rate for the region and faster than the UK average, against a backdrop of ongoing supply disruptions and high commodity prices.

"However, businesses expect the rise in input costs to ease markedly in the year ahead.

"Also, selling prices are expected to increase at a more modest rate in 2023, after rising by a near record high for the region.

"Higher selling prices and strong sales predictions mean that profits for businesses in Yorkshire and the Humber are expected to rise more sharply than in any other UK nation or region.

"Businesses also expect employment growth to increase in the year ahead."