Business confidence in Wales rose 34 points during October to 57%, according to the latest Business Barometer from Lloyds.
Companies in Wales reported higher confidence in their own business prospects month-on-month, up 28 points at 55%. When taken alongside their optimism in the economy, up 40 points to 59%, this gives a headline confidence reading of 57% (vs. 23% in September).
A net balance of 79% of businesses in the country also expect to increase staff levels over the next year, up 43 points on last month.
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 (57%), evolving their offering, for instance by introducing new products or services (44%) and entering new markets (42%).
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 climbed eight points in October to 50%.
Firms’ optimism in their own trading prospects rose 11 points to 62%, while their confidence in the wider economy climbed six points to 39%.
The North East and West Midlands were the joint-most confident of any UK nation or region in October (both 62%), followed by London (60%).
Sector Insights
October saw the manufacturing sector’s confidence increase by 31 points to 62%, indicating stronger momentum in the sector. Retail firms also reported a rise in confidence, with the figure increasing by 13 points to 53%. Construction saw a confidence gain for the first time in five months, increasing 23 points to 58%. However, the service sector saw a decline for a third consecutive month, falling three points to 44%.
Dave Atkinson, regional director for Wales at Lloyds, said: “Welsh business confidence is now back above the UK average.
“The country’s businesses are pressing ahead with ambitious plans for growth, and it’s particularly good to see such a strong focus on investment in people through skills and hiring – a signal of long-term ambition that can bring benefits to Welsh communities and the local economy, as well as firms themselves.”
Hann-Ju Ho, Senior Economist, Lloyds Commercial Banking, said: “Business confidence has risen following a fall in September, with trading prospects and economic optimism nearing the levels reported in the summer. Pricing pressures appear to have eased but continue to be driven primarily by general inflation and rising input and staffing costs.
“Over the course of this year, firms have demonstrated their resilience by adapting to challenges, despite higher labour costs, by focusing on hiring and workforce development.”
