BUSINESS confidence in Yorkshire fell by 15 per cent in the last quarter of 2016 according to a new report from Lloyds Bank.

Economic uncertainty and weakened demand have been cited as the biggest threats for the first half of 2017 by businesses.

The confidence index is an average of the expected sales, orders and profits over the next six months of respondents.

The confidence index for businesses in Yorkshire has fallen to 17 per cent, down from 32 per cent in September 2016, the second biggest fall in the UK after the West Midlands.

Almost 30 per cent of businesses identified economic uncertainty as the biggest threat to Yorkshire businesses, followed by weaker UK demand as firms wait for further details of the UK's exit from the European Union.

Political uncertainty, weaker overseas demand, costs, a lack of skilled workers, and regulations were all also identified as reasons business confidence.

The biggest drop in exports is expected for businesses exporting to North America, which is will see a decrease on 16 per cent since September 2016, and total exports are expected to drop by seven per cent.

However, exports are expecting to increase by 13 per cent to Asia and by seven per cent to the Middle East in the first half of this year.

Leigh Taylor, regional director for small and medium enterprise banking in Yorkshire at Lloyds Banking Group said: “Business confidence in Yorkshire has dropped significantly since September, a sign that we are entering 2017 with an uncertain business outlook.

“Firms are worried about economic uncertainty and falling demand, which we may see addressed in the coming months as the UK’s exit from the EU becomes clearer.

“Businesses are planning to export to new territories as they widen their targets in the first half of next year and, while figures are down on September, it is positive that firms are still planning to take on new staff.

"Coupled with our support businesses should have the confidence that their growth ambitions in the UK and abroad will be supported in the year ahead.

“While this year may present more challenges for businesses, including understanding the impact that leaving the EU will have, Yorkshire business owners are resilient and continuing to do what they do best – getting on with growing their businesses.”