Welsh businesses were among the least optimistic in the UK in July, the latest Business Barometer from Lloyds Bank Commercial Banking has found.
Business confidence in Wales fell to 17 per cent in July, three points below last month’s figure of 20 per cent and lower than any other region except the East of England.
Companies across the nation reported lower confidence in their business prospects at 10 per cent, 18 points lower than the previous month, despite the fact that their optimism about the overall UK economy rose 12 points to 23 per cent.
Companies’ hiring intentions remained unchanged in July, with a net balance of 10 per cent of businesses across the nation expecting to hire more staff during the next year.
Across the UK, overall confidence edged ahead to 30 per cent, up one point on June, as firms’ optimism about the economy rose two points to 25 per cent. Businesses’ confidence in their own business prospects held steady at 34 per cent.
The Business Barometer questions 1,200 businesses every month and provides early signals about UK economic trends both regionally and nationwide.
Andrew Kemp regional director at Lloyds Bank Commercial Banking in South Wales, said:
“It’s concerning to see that Welsh businesses were among the least confident in the country in July, with only firms in the East of England registering a lower confidence figure.
“While this was largely due to companies becoming less confident about their business prospects, it’s encouraging to see Welsh firms are becoming more optimistic about the wider economy and maintaining their hiring accordingly.
“As we hopefully gain more clarity regarding our economic future in the coming months, we expect more companies to invest in growth.”
Across the UK, a net balance of five per cent of businesses feel that the country’s exit from the European Union will have a positive impact on their expectations for business activity. This is in contrast with a net balance of 18 per cent that expected it to have a negative impact a month ago.
Businesses in the West Midlands showed the most confidence, at 49 per cent, ahead of London (47 per cent) and the North West (38 per cent).
Businesses in the East of England were the least optimistic in the UK at 12 per cent, followed by Scotland and Wales, which both registered an overall confidence figure of 17 per cent.
Overall confidence was the strongest in the construction sector (48 per cent), followed by manufacturing (38 per cent) and transport and communication (28 per cent).
Hann-Ju Ho, senior economist for Lloyds Bank Commercial Banking, said: “The fact that economic optimism rose across the UK as a whole this month illustrates a slightly more positive view on the balance of risks for the country’s economy, despite the expected interest rate rise this year.
“It will be interesting to see if the overall business confidence measure shifts from its steady position towards the end of the year.”