Welsh firms pessimistic
Business confidence in Wales fell to 17% in July, three points below last month’s figure of 20% and lower than any other part of the UK except the east of England, latest research from Lloyds Bank Commercial Banking shows.
Companies reported lower confidence in their business prospects at a positive net balance of just 10%, some 18 points lower than the previous month, despite the fact that their optimism about the overall UK economy rose 12 points to 23%.
Welsh businesses’ hiring intentions remained unchanged in July, with a net balance of 10% of firms across the nation expecting to hire more staff during the next year.
Across the UK, overall confidence edged ahead to 30%, up one point on June, as firms’ optimism about the economy rose two points to 25%. Firms’ confidence in their own business prospects held steady at 34%.
Lloyds’ 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.”
Across the UK, a net balance of 5% of firms feel the country’s exit from the EU will have a positive impact on their expectations for business activity. This is in contrast with a net balance of 18% that expected it to have a negative impact a month ago.
Businesses in the West Midlands showed the most confidence, at 49%, ahead of London (47%) and the north-west (38%).
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.”