Business confidence in Wales rose 14 points during March to 9%, the first net positive reading since the onset of the coronavirus pandemic in March 2020, according to the latest Business Barometer from Lloyds Bank Commercial Banking. The data has been released just a week after the one-year anniversary of the first COVID-19 lockdown.
Companies reported higher confidence in their own business prospects month-on-month, up six points at 15%. When taken alongside their optimism in the economy, up 23 points to 4%, this gives a headline confidence reading of 9%.
The Business Barometer questions 1,200 businesses monthly and provides early signals about UK economic trends both regionally and nationwide.
When it comes to jobs, a net balance of 6% of businesses in the region expect to increase staff levels over the next year, the same proportion as last month.
The national picture
Overall UK business confidence rose for a second consecutive month in March. Firms’ confidence increased by 13 points to 15%, the highest reading since February 2020, before coronavirus was confirmed as a pandemic by the World Health Organisation.
UK firms’ economic optimism also increased by 15 points to 17%, while confidence in their own business prospects jumped 10 points to 12%.
In fact, every UK region and nation reported an increase in overall confidence during March, with most reporting a double-digit rise month-on-month. The North East (1% to 26%), West Midlands (3% to 27%) and East of England (-8% to 12%) reported the largest increases. Scotland was the only area to remain in net negative territory despite an increase in confidence, giving a reading of -2%.
Amanda Dorel, regional director for Wales at Lloyds Bank Commercial Banking, said: “Businesses in Wales are undoubtedly more optimistic following the end of stay-at-home restrictions and the reopening of non-essential retail. However, uncertainty still lingers, particularly for those in the hospitality and leisure sector who remain unable to trade.
“Whatever the months ahead bring, we will remain by the side of businesses across Wales to help them navigate challenges and create opportunities on the road to recovery.”
In the sectors, manufacturing and retail recorded the highest confidence levels, both at 25%, while services and construction rose to 11% and 12% respectively
Hann-Ju Ho, Senior Economist, Lloyds Bank Commercial Banking, said: “It’s been a year since the first lockdown and the surge in confidence this month tells us firms are increasingly confident about economic recovery.
“The broadly positive outlook is driven by steady vaccine deployment, the roadmap out of lockdown and the extension of government support measures. It will be interesting to see whether the momentum for stronger business optimism is sustained in the months ahead.”