Business confidence in Wales fell 40 points during September to 23%, according to the latest Business Barometer from Lloyds.
Companies in Wales reported lower confidence in their own business prospects month-on-month, down 38 points at 27%. When taken alongside their optimism in the economy, down 41 points to 19%, this gives a headline confidence reading of 23% (vs. 63% in August).
Looking ahead to the next six months, Welsh businesses identified their top target areas for growth as investing in their team, for example through training (42%), introducing new technology (27%) and evolving their offering, for example by launching new products or services (27%).
The Business Barometer, which surveys 1,200 businesses monthly and which has been running since 2002, provides early signals about UK economic trends both regionally and nationwide.
National picture
Overall, UK business confidence fell 12 points in September to 42%.
Firms’ confidence in their own trading prospects fell 12 points to 51%, and their optimism in the wider economy fell 11 points to 33%.
The North East was the most confident UK nation or region in September, climbing 13 points to 68%, followed by London (57%).
Sector Insights
Firms across manufacturing, construction, retail and services all saw confidence fall this month. The biggest change was in manufacturing with a decline of 31 points to 31%, a two-year low. Retail sentiment fell 17 points to 40%, its lowest level in four months. Similarly, confidence in the service sector fell six points to 47%, the lowest reading since April. Construction continued to decline for the fourth consecutive month, dropping 5 points to 35%.
Samantha Noble, area director for Wales at Lloyds, said: “Despite this month’s fall in confidence, Welsh businesses are continuing to identify ways to strengthen their resilience and drive further growth. And it’s particularly encouraging that they’re investing in their teams as a priority – something that will have benefits for the wider Welsh economy. We’ll continue to provide our on-the-ground support as businesses pursue their next steps.”
Hann-Ju Ho, Senior Economist, Lloyds Commercial Banking, said: “While increased market volatility earlier in the month may have impacted confidence, levels of trading prospects and economic optimism remain above their long-term averages. Businesses may find reassurance that the Bank of England is expected to reduce interest rates further in the next six months, while long-term global bond yields have calmed which, if sustained, may have a positive impact on businesses as we move into the last few months of the year.”
