Business confidence in Wales fell 54 points during April to -52%, according to the latest Business Barometer from Lloyds Bank Commercial Banking.
Companies in Wales reported lower confidence in their individual business prospects month-on-month, at -39%hen taken alongside their views of the economy overall, this gives a headline confidence reading of -52%.
The Business Barometer questions 1,200 businesses monthly and provides early signals about UK economic trends both regionally and nationwide.
More than a quarter (28%) of businesses in Wales reported operating below 50% capacity, while almost a third (32%) reported operating above this level. More than third (34%) were not operating at all.
In an illustration of the impact of COVID-19 on the region’s business, three-quarters of firms (75%) reported seeing a fall in demand for their products and services. Just 5% saw demand increase.
Of the 68% of businesses reporting disruption to their supply chain during April, more than a fifth (22%) expected the situation to improve within six months, while 4% expected it would take more than 12 months to return to normal levels.
Amanda Dorel, regional director for Wales at Lloyds Bank Commercial Banking, said: “Welsh business confidence had been low prior to the current outbreak, so it is perhaps unsurprising that sentiment has dipped further than most areas of the UK. Core industries, particularly tourism, have been hit at a critical time of year and it is unclear to what extent they will be able to re-open as lockdown measures ease in the coming months.
“As such, we’re continuing to support businesses across the nation with swift action, providing £2 billion of arrangement fee-free funding to ensure they are able to weather the storm of coronavirus.”
National overview
Across the UK, overall confidence fell 38 points to -32% as firms’ optimism in the economy and confidence in their own prospects dropped sharply.
In April, overall business confidence fell across all four sectors. Confidence in the manufacturing sector saw the sharpest decline, falling 46 percentage points to -35%, with the retail sector falling to -33%. The construction sector fell by 34 percentage points to -20%, while services fell 23 points to -22%.
Paul Gordon, managing director for SME and Mid Corporates, Lloyds Bank Commercial Banking, said: “April has shown the unprecedented impact of the shutdown for businesses across the UK with trading prospects and overall confidence free-falling across the regions. During this time it is important that businesses take steps to access the government schemes such as tax deferment, rates reductions, small business grants and the job retention scheme and the various finance options available to them so that they can survive through this crisis and be best placed to open their doors again in the months ahead.”
Hann-Ju Ho, senior economist for Lloyds Bank Commercial Banking, said: “The results in April demonstrate the full impact of the measures taken by the Government to shut down large parts of the economy to help contain the pandemic, with sentiment now matching the all-time low of December 2008. There are tentative signs that China’s economy is stabilising as it starts to ease lockdown measures, and that may serve as a template for the rest of the world.”
