Business confidence in Wales was the highest of any UK nation or region for a second month in a row in July according to the latest Business Barometer from Lloyds.
While Welsh firms’ optimism in the economy dipped two points to 66%, their optimism in their own trading prospects rose 20 points to 86%. Taken together, this gives a headline confidence reading of 76% (vs. 67% in June).
A net balance of 68% of businesses in the region also expect to increase staff levels over the next year, up nine 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 (59%), evolving their offering, for instance by introducing new products or services (38%) and introducing new technology, such as AI and automation (35%).
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 increased one point in July to 52% – its highest level since 2015 and the third consecutive monthly increase.
Firms’ optimism in their own trading prospects rose one point to 58%, while their confidence in the wider economy increased two points to 47%.
The North East (73%) was the second-most confident UK nation or region after Wales.
Sector Insights
July saw the service sector’s confidence increase by 11 points to 61%, one of the main drivers behind this month’s overall increase in business confidence, indicating strong momentum in the sector. This gain was partially offset by declines in other areas, with retail firms down eight points, manufacturers down four points and the construction sector down six points.
Samantha Noble, area director for Wales at Lloyds, said: “These results reflect the wealth of innovation, creativity and ambition that characterises Wales’ economy.
“As businesses look to build on this outlook, we’ll continue to be ready to support their next steps – whether that involves helping them make new investments in their team, or introduce new, cutting-edge technology.”
Hann-Ju Ho, Senior Economist, Lloyds Commercial Banking, said: “This continued upward trend reflects a growing sense of cautious optimism across the UK economy, underpinned by both improved trading prospects and broader economic sentiment. Despite ongoing cost pressures, firms are positioning for growth, particularly in services where hiring and investment plans are accelerating.
“Overall business confidence remains buoyant, with firms well placed to take advantage of opportunities such as new markets, adopting new technology and workforce expansion amid evolving market conditions.”
