Business confidence in Wales fell 13 points during August to 63%, according to the latest Business Barometer from Lloyds.
Companies in Wales reported lower confidence in their own business prospects month-on-month, down 21 points at 65%. When taken alongside their optimism in the economy, down six points to 60%, this gives a headline confidence reading of 63% (vs. 76% in July).
Looking ahead to the next six months, Welsh businesses identified their top target areas for growth as investing in their teams (51%), evolving their offering, for example by introducing new products or services (41%), and entering new markets (32%).
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 rose two points in August to 54%.
While firms’ confidence in the wider economy dropped three points to 44%, their optimism in their own trading prospects rose five points to 63%.
London was the most confident part of the UK in August (69%), followed by the East of England (64%).
Sector Insights
Manufacturing firms saw confidence up 14 points this month, to 62%. This level was previously seen in 2015. Retailers also saw an increase in confidence this month, with levels up 13 points to 57%, a five-month high. However, construction firms confidence fell by five points to 40%, a four-month low while confidence in service sector firms also fell eight points to 53%.
Samantha Noble, area director for Wales at Lloyds, said: “Despite a dip in confidence this month, Welsh business confidence continues to sit above the UK average.
“Firms’ focus on investments in new products and new markets reflects the ambition that characterises the Welsh business community. We’ll continue to support companies across the nation as they pursue new growth opportunities.”
Hann-Ju Ho, Senior Economist, Lloyds Commercial Banking, said: “This continued upward trend in business confidence suggests UK firms remain optimistic about their own trading prospects while there is a modest cooling of confidence in the wider UK economy. Firms are focusing on what they can control, with many looking to pursue growth opportunities, including entering new markets and adopting new technologies.
“Wage expectations have seen a notable shift this month, but it remains to be seen whether this signals the start of a sustained trend or a temporary uplift, as they have been broadly stable in recent months.”
