Business confidence in Wales rose eight points during April to 38%, according to the latest Business Barometer from Lloyds.
Companies in Wales reported unchanged confidence in their own trading outlook month-on-month at 46%. When taken alongside their optimism in the economy, up 16 points to 30%, this gives a headline confidence reading of 38% (vs. 30% in March).
Wales enjoyed the largest year-on-year confidence growth of all the UK’s nations and regions. It was also the only area to report both year-on-year and month-on-month growth.
A net balance of 34% of businesses in the region also expect to increase staff levels over the next year, up nine points from last month.
Looking ahead to the next six months, Wales businesses identified their top target areas for growth as investing in their team, for example through training (48%), introducing new technology, such as AI or automation (42%), and evolving their offering, for example by introducing new products or services (40%).
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.
Amanda Murphy, CEO for Lloyds Business and Commercial Banking said: “Businesses told us their confidence fell as inflation pressures re-emerged, global uncertainty persisted and costs remained elevated. While sentiment declined, it remained above the long-term average, with nearly two-thirds expecting stronger output in the coming year.
“UK businesses are resilient and adept at deploying strategies to defend growth in uncertain conditions. Over the past month, we’ve seen them opt for flexibility wherever possible. They’re building contingency into their short and medium-term plans, rather than expecting a rapid return to normal. Protecting margins has become more important. That means tougher cost scrutiny and a greater focus on balancing growth with profitability.
“In this environment, as with other recent market disruptions, we continue to observe that sustainable success comes from discipline, resilience and clarity about what really drives long term value.”
National Picture
Overall, UK business confidence fell 11 points in April to 44%.
Firms’ confidence in their own trading outlook fell six points to 54%, and their optimism in the wider economy dropped 17 points to 33%.
The East Midlands was the most confident UK nation or region in April at 43%, followed by London at 51% and the West Midlands at 49%.
Nathan Morgan, area director for Wales at Lloyds, said: “Wales is bucking the UK-wide trend when it comes to business confidence, increasing during April against the national trend.
“This confidence is the result of Welsh firms’ ongoing focus on investment to protect their position against future disruption. At Lloyds, we’ll continue to nurture this recent momentum of growth by working with businesses across the nation to equip them with the financial tools they need.”
