Business confidence in Wales on the rise

WELSH business confidence has risen for the first time in more than a year but is still lagging behind the UK average, according to new research from the ICAEW Wales

The latest ICAEW UK Confidence Monitor (BCM) index for Wales is now in positive territory, but at plus 2.4 in Q2 2017 it is still significantly behind the UK average of plus 6.7.

Zero is deemed as confident – ranging up to plus 100 for as much more confident. Conversely minus 100 is deemed on the index as much less confident.

Martin Warren, ICAEW Wales director, said: “We have waited a long time to see business confidence in Wales turn positive. While it is encouraging to see an end to a long period of negative sentiment, as a nation we are still nowhere near as upbeat about our business prospects as others trading elsewhere in the UK.

“Welsh businesses expect to see improvement in their sales but are cautious about raising their prices with investments slowing and inflation rising. Our exports are still lagging behind the long-term average.

“Whoever forms the next UK Government will need to ensure Britain’s future is more prosperous than recent years and that prosperity reaches all parts of Wales.”

Exports have shown little sign of responding to the fall in sterling, with growth of 1.3% per year in Q2 2017, well below the longterm average of about 3%. Exporters do expect an improvement over the next year though (3.6%).

Domestic sales in Wales are growing at a faster rate than export sales and are predicted to maintain that pace again in the year ahead.

Firms seem bullish about overall sales growth over the next year, but they do not expect to be able to raise prices by any significant amount (just 0.5%).