Business confidence in Wales fell three points during February to 29%, according to the latest Business Barometer from Lloyds.
Companies in Wales reported lower confidence in their own business prospects month-on-month, down three points at 35%. When taken alongside their optimism in the economy, down five points to 22%, this gives a headline confidence reading of 29% (vs. 32% in January).
Looking ahead to the next six months, Welsh businesses identified their top target areas for growth as investing in their team, for example through training (71%), evolving their offering, for instance by introducing new products or services (52%) and entering new markets (29%).
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.
National picture
Overall, UK business confidence was unchanged since January at 44%.
Firms’ confidence in their own trading prospects fell six points to 53%, but their optimism in the wider economy rose eight points to 36%.
London was the most confident UK nation or region in February (59%), followed by the North West (58%) and Northern Ireland (58%).
Sector Insights
The construction sector saw strong gains in overall confidence. In February, confidence was up 14 points to 60%, with manufacturing also seeing a boost, up five points to 37%. Confidence for retail and service sector firms softened slightly, each down two and three points respectively.
Nathan Morgan, area director for Wales at Lloyds, said: “While business confidence dipped this month, we know Welsh businesses are continuing to press ahead with their growth strategies.
“Whether their plans are to upskill their teams, enter new markets or diversify product and service offerings, we’ll continue to be ready to provide our support.”
Hann-Ju Ho, Senior Economist, Lloyds Commercial Banking, said: “It’s encouraging to see optimism in the wider economy returning, although with a small reduction in firms’ confidence in their own trading prospects. The majority of the survey results were collected following the Bank of England’s close decision to hold interest rates at its February meeting, signalling potential easing ahead, which may have alleviated business concerns, including those around cost pressures. While the rise in pricing expectations to a six month high may indicate firms are looking to rebuild their margins in 2026.
“It’s also great to see confidence increase for manufacturers and construction firms as they are key for UK growth.”
