South Yorkshire Economy Stabalising as AI Confidence Grows Survey Finds

South Yorkshire businesses are ambitious about embracing Artificial Intelligence, but a significant number admit they are not yet ready to do so, according to the latest Quarterly Economic Survey.

The survey – delivered jointly by Doncaster Chamber, Barnsley & Rotherham Chamber, and Sheffield Chamber in partnership with the British Chambers of Commerce – provides one of the largest and most respected snapshots of business conditions across the UK. Nationally, QES results feed directly into HM Treasury and the Bank of England’s policymaking, while locally they give crucial insight into South Yorkshire’s economic climate.

This quarter’s survey, sponsored by the South Yorkshire Mayoral Combined Authority, placed a spotlight on AI readiness to align with the region’s newly launched Growth Strategy for South Yorkshire. Between 18 August and 15 September 2025, 290 local businesses shared their views, providing one of the clearest pictures yet of how South Yorkshire is preparing for the opportunities and challenges that AI presents as well as current economic conditions for the region.

Almost nine in ten firms (86%) said they plan to increase AI integration across business areas. Yet when asked how prepared they were, the responses revealed a mixed picture: just 14% felt “very prepared” with a clear strategy, while 55% said they were only “somewhat prepared” and developing plans. Alarmingly, almost a third (31%) admitted they had ambitions for AI but were “not yet well prepared.”

Dan Fell, Chief Executive of Doncaster Chamber, said:

“Businesses in our region clearly see the potential of AI, but too many are trying to run before they can walk. One in three have ambitions to integrate AI but don’t yet have the skills, policies or leadership structures in place. That’s a risk, but also an opportunity. With the right training and collaboration, South Yorkshire firms can be at the forefront of responsible and impactful AI adoption. The stabilisation we’re seeing in the wider economy this quarter shows that now is the right moment to get serious about investing in innovation.”

The survey found that formal AI policies remain rare. Just one in five (21%) have a live AI policy, while a further 20% have policies in development. Collaboration is also limited, with more than half (54%) of businesses working independently and only 29% actively partnering with others – most commonly with tech companies or consultants.

Carrie Sudbury, Chief Executive of Barnsley & Rotherham Chamber, commented:

“These results shine a light on both the potential and the pitfalls of AI for South Yorkshire. It’s encouraging that marketing, operations and customer service teams are already leading the way, but we mustn’t ignore the gaps in areas like HR. The biggest barriers cited – lack of knowledge, lack of in-house skills and uncertainty about ethics – are all areas where collective action can make a difference. Our members are also clear that alongside innovation, Government must address fundamentals like taxation and labour costs if we want to maintain momentum on growth.”

This sits against a wider backdrop of gradual stabilisation in the local economy. More businesses reported that UK sales and orders had remained steady compared with last quarter, and cashflow turned positive for the first time in three quarters. Export demand, while still weaker than a year ago, also improved.

Recruitment remained cautious, however, with permanent hiring at its second-lowest level in over four years. Temporary recruitment saw a slight rise, and skills shortages eased overall – particularly for clerical workers – though they remain acute for skilled manual and technical roles.

Confidence is recovering slowly. More firms are optimistic about turnover and profitability than in recent quarters, but worries about corporate taxation and inflation remain high, with half of businesses reporting more concern about tax than three months ago.

Louisa Harrison-Walker, Chief Executive of Sheffield Chamber and co-chair of Mayor Coppard’s Business Advisory Board, said:

“The QES is always a reality check – it tells us exactly where businesses are thriving and where they are anxious. It’s reassuring to see confidence creeping back and export performance improving, but the message on AI is stark: ambition is not enough. Businesses want to embrace new technologies but lack the tools, skills and trust to do so at scale. That’s why SYMCA’s Growth Strategy, with its focus on innovation and skills, is so timely. It’s a chance to position South Yorkshire not only as a region that adopts AI but as one that does so responsibly, inclusively, and with real economic benefit.”

The message from this quarter is clear: South Yorkshire businesses are stabilising after a challenging year and are hungry to embrace innovation. But with the Chancellor’s Budget setting the tone for the months ahead, firms are looking for more than rhetoric. Without targeted support on AI skills, knowledge and ethics – backed up by practical measures on taxation, investment and workforce development – a significant proportion risk being left behind.