Barometer shows business optimism increasing in Wales

BUSINESS confidence in Wales has risen sharply on the back of growing optimism over the trading outlook, according to the latest Business Barometer from Lloyds Bank Commercial Banking.

Overall confidence rose five points during January to a positive balance of 13%. Welsh firms reported higher confidence in their prospects at 14% and higher economic optimism at 12%. This gives an overall confidence level of 13%.

However, businesses’ hiring intentions showed that a net balance of less than one in 20 (4%) businesses in Wales expect to hire more staff during the next year, down five points on last month.

Across the UK, overall confidence rose 13 points to 23% as firms’ optimism in the economy soared 22 points to 24%, while confidence in their own prospects increased four points to 22%.

The Business Barometer questions 1,200 businesses monthly and provides early signals about UK economic trends both regionally and nationwide.

Across Wales, a net balance of 17% of businesses said they felt that Brexit was having a negative impact on their expectations for business activity, compared with 6% a month ago.

Amanda Dorel, regional director for Wales at Lloyds Bank Commercial Banking, said: “The mediumterm certainty provided by December’s general election outcome looks to have boosted Welsh business confidence and we’d expect growth plans that had previously been mothballed to now be revived.

“That being said, it seems that the UK’s exit from the EU remains a cause for concern among business owners and is contributing to the current mood being more tempered than in other parts of the UK.

“With the employment market remaining relatively tight, firms will be looking to invest in the resources already at their disposal, so it’s critical that they have the right funding and advice to hand. We anticipate lending up to £1.1bn to Welsh businesses in 2020 as part of our plan to help Britain prosper.”

Firms in London had the highest confidence at 38%, ahead of the South-West at 34%, and East Midlands at 31%. Those in Scotland were least confident, at -4%, 27 points below the national average.