Business confidence in Wales has grown to its highest level since 2014, a new report from chartered accountancy body ICAEW has found.
The Business Confidence MonitorTM (BCM) report for Wales found that confidence had climbed to its highest level since the third quarter of 2014.
This was likely due to the successful rollout of coronavirus vaccines, which led Welsh businesses to expect a strong economic recovery with hopes of large increases in domestic sales following falls over the past year.
Businesses reported that domestic sales had fallen slightly, while exports suffered the biggest fall seen since the BCM began in 2004, as global demand fell sharply during the coronavirus crisis and lockdowns reduced companies’ ability to transport their goods abroad. The contractions in sales also led to profit levels falling for many businesses.
A third of Welsh businesses said customer demand was a growing problem, but regulatory requirements were the most widespread concern, cited by over a third of companies. This was likely because of post-Brexit customs controls which affected Welsh exporters who are more reliant on the EU market than in other parts of the UK.
Some 30% of businesses cited transport problems as a growing source of difficulty, compared to 16% the year before.
Employment levels stayed largely the same over the past year. This was helped by the extension of furlough scheme, which should continue to limit job losses, at least temporarily.
Beverley Waters, ICAEW Regional Director for Wales, said:
“It’s positive news for the Welsh economy that businesses are feeling more confident for the future, doubtless a reflection of the vaccine rollout and prospects of a strong recovery.
“While challenges remain, Welsh businesses expect domestic sales and exports to increase once again. This is a positive outlook for our economy, which is needed after a difficult year.”