Wales lags rest of the UK in business confidence

BUSINESS confidence in Wales was the lowest in the UK during January at 14%, according to the latest Business Barometer from Lloyds Bank Commercial Banking.

Companies in Wales report lower than average business prospects at 17% and lower economic optimism at 10%.

Together, this gives an overall confidence of 14%, which is 21 points below the average across the UK of 35%.

Across the UK overall confidence rose seven points to a nine-month high, driven mainly by a rise in firms’ economic optimism.

The Business Barometer provides early signals about UK economic trends and has been run monthly since January 2002. This is the first time that the survey, which questioned 1,200 businesses, has been carried out on a regional as well as national basis.

Welsh businesses’ economic optimism (10%) is lower than the national average of 31%. Meanwhile, their confidence in their own business prospects (17%) is 22 points lower than across the UK as a whole.

Companies’ hiring intentions showed that a net balance of just 8% of businesses in the region expecting to hire more staff during the next year, while firms expect a median annual increase in average pay in the region of 1% to 2% during 2018.

Across the region, a net balance of 8% of businesses feel that the UK’s exit from the European Union was having a positive impact on their expectations for business activity.

Andrew Kemp, regional director for south Wales at Lloyds Bank Commercial Banking, said: “It’s concerning to see that while overall UK business confidence has risen, firms in Wales feel much more pessimistic – to the extent that it was the lowest ranking region analysed.

“This lack of confidence seems to have affected companies’ plans to invest in expanding their workforce, with only a small percentage of businesses stating that they will be creating jobs over the coming months.

“Speaking to firms across the region, they are resilient but remain cautious due to ongoing economic and political uncertainty. Companies will be watching the next phase of EU negations carefully and will welcome any clarity they may bring.”

Overall confidence is highest among businesses in London and the North West, both at 47%, followed by the West Midlands at 45%.

Businesses in Wales are the least confident in the UK, closely followed by Scotland (18% and the North East (18%).