Business confidence in Wales fell three points during November to -15%, according to the latest Business Barometer from Lloyds Bank.
Companies in the region expect neither an increase or decrease in business activity over the next 12 months – making November the first month since March that firms haven’t expected trading prospects to worsenhen taken alongside their views of the economy overall, this gives a headline confidence reading of -15%.
When it comes to businesses’ hiring intentions, a net balance of 8% expect to reduce staff levels over the next year, down one point on last month.
The Business Barometer questions 1,200 businesses monthly and provides early signals about UK economic trends both regionally and nationwide.
Vaccine news boosts UK confidence
At UK level, the report tracked a dramatic increase in business confidence after the 9th of November announcement that the Pfizer and BioNTech vaccine has 90% efficacy against COVID-19.
Firms surveyed after the announcement between 9th and 16th November had an overall confidence of -15%, which was seven points higher than those polled before, between the 2nd and 8th November (-22%).
For the month as a whole, UK business confidence registered at -21%, down three points on October.
Amanda Dorel, regional director for Wales at Lloyds Bank Commercial Banking, said: “The fire break lockdown across Wales was always likely to have an impact on business confidence during November. However, the relatively small dip we saw this month in comparison to other periods of the year is indicative of the resilience the nation’s SMEs have developed – and the possibility of a potential vaccine is providing some light at the end of the tunnel.
“We will continue to stand by the side of Welsh firms, providing the support they need to get through these next few months.”
UK regional and sector overview
The North East had the highest confidence in November at -8%, followed by Yorkshire & the Humber (-11%) and Wales (-15%). Meanwhile, optimism fell 10 points in Scotland to -38% making it the least confident of the UK’s nations and regions.
In the industry sectors, confidence declined in manufacturing, construction and retail as stricter lockdown measures were imposed across the UK. Manufacturing confidence fell by 10 points to 25%, driven by a sharp fall in optimism about the economy and a smaller decline in trading prospects (chart 3). Construction confidence dropped by 13 points to 23%, while retail confidence fell by five points to 12%. Services confidence, meanwhile, increased slightly by three points to 21%, having already fallen significantly in October.
Hann-Ju Ho, Senior Economist at Lloyds Bank Commercial Banking, said: “The sustained number of coronavirus cases and more restrictive lockdown measures saw overall business confidence fall again this month. Firms across the sectors also continue to remain cautious as they prepare for a new trading relationship with the EU. However, confidence increased following the news of a potential vaccine to help combat the virus. The months ahead will be key for businesses as they navigate the winter months and adapt to the evolving landscape.”