BUSINESS confidence in Yorkshire is at its highest for more than a year, according to new research.

The good news came from the latest Institute of Chartered Accountants in England and Wales (ICAEW) UK Business Confidence Monitor.

The Monitor, backed by Orange UK, found that optimism had been helped towards its high level by upward trends in manufacturing, engineering and construction, while the local property market remained buoyant, with prices growing two percentage points above the national average in the first quarter of this year.

Yorkshire's confidence index score has hit +9.8 percentage points, 3.9 points higher than the national average of +5.9 points.

David Dickson, managing director of York chartered accountants Garbutt & Elliott, and chairman of the ICAEW regional small and medium-sized enterprise group, said: "The return of confidence in the key areas of business profit and turnover and also the forecast of sales growth is very welcome.

"The optimism currently surrounding manufacturing and engineering, both of which still have a heavy presence in our region, appears to have boosted anticipation of export growth, alongside the rejuvenation of European economies."

Turnover was forecast to increase by 6.9 per cent, growing an extra 2.4 percentage points on the previous 12 months. Profit growth was set to be 1.7 percentage points higher than reported in the past 12 months, though it is forecast to grow more slowly than the national average rate.

Finance professionals in the region expect sales volumes to grow by 6.8 per cent over the next 12 months, moving above the figure expected nationally.

But Mr Dickson warned: "We should nonetheless not lose sight of the more worrying view that capital expenditure growth will fall, from one of the highest levels nationally over the past 12 months to the lowest in the coming year.

"This downturn could suggest that local businesses are still fearful of their longer term prospects following the last two years of low optimism reported in this survey. Weaker capital investment is likely to hit research and development, which are vital ingredients in the bid to keep our UK businesses ahead in the global market place."

The positive message about Yorkshire follows contrasting bad news for the north east, which came in a survey commissioned by the regional development agency One NorthEast and the Confederation of British Industry.

It found that 86 per cent of businesses questioned in the region were feeling the pressure of rising energy prices, and concerns about investment and poor road and rail links. The north east, said the report, was the only region in England and Scotland to be pessimistic about the business outlook for the next six months.