Business confidence in Wales rose 12 points during July to 44%, according to the latest Business Barometer from Lloyds.
Companies in Wales reported higher confidence in their own trading outlook month-on-month, up seven points at 55%. When taken alongside their optimism in the economy, up 17 points to 33%, this gives a headline confidence reading of 44% (vs. 32% in June 2026). This marks the highest confidence reading for Wales so far in 2026
Business confidence in Wales now sits above the 12-month average of 40%, with its highest figure of 76% in July 2025.
Looking ahead to the next six months, Welsh businesses identified their top target areas for growth as introducing new technology, such as AI or automation (52%), entering new markets (36%), and investing in their team, for example through training (33%).
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.
Nathan Morgan, Area Director for Wales at Lloyds, said: “It’s encouraging to see confidence among Welsh businesses rise again this month, with firms feeling more positive about both their own trading outlook and the wider economy.
“While broader economic optimism remains measured, businesses are clearly focused on the areas they can control – including adopting new technology, exploring new markets and investing in their teams.
“With confidence sitting above the 12-month average, there’s a positive sense of momentum building across Wales. We’ll continue to support businesses as they adapt and pursue new opportunities for growth.”
Overall, UK business confidence rose five points in July to 49%, hitting a four-month high.
This was driven by an increase in economic optimism, reflecting the decline in global energy prices, the Bank of England holding interest rates and the announcement of an interim peace agreement in the Middle East at the time of the survey.
Optimism in the wider economy rose 11 points to 42%, compared to a 12-month average of 37%. Of those surveyed, 59% said they were optimistic (up four points from June) in the wider economy, while those who felt pessimistic decreased by seven points to 17%. The main factors cited by firms who felt more positive this month were, stronger customer demand, improving interest rates or financial conditions and better economic news.
Businesses’ own trading outlook remained unchanged at 56% in July, compared to a 12-month average of 57%. Sixty-five percent of firms (up one point from June) expect stronger output over the year ahead, while those expecting weaker activity increased one point to 9%. Among firms expecting stronger activity, the main factors were, stronger customer demand, increase investment in capacity or tech and improved supply chain conditions.
Amanda Murphy, CEO for Lloyds Business and Commercial Banking said:
“It’s encouraging to see business confidence reach its highest level in four months, driven by a significant improvement in economic optimism. While challenges remain, these results suggest many businesses are feeling more optimistic about the opportunities ahead.
“Businesses have remained remarkably resilient in recent months, with many focusing on investing in their future, improving productivity and making sure they’re well placed to respond as market conditions change. The stronger confidence we’re seeing among smaller businesses and firms focused on the domestic market is particularly encouraging, suggesting more businesses are starting to see opportunities for growth and investment.”
