Business confidence in Wales fell 27 points during August to 35%, according to the latest Business Barometer from Lloyds Bank Commercial Banking.
Companies in Wales reported lower confidence in their own business prospects month-on-month, down 19 points at 43%. When taken alongside their optimism in the economy, down 34 points to 28%, this gives a headline confidence reading of 35% (vs. 62% in July).
Looking ahead to the next six months, Welsh businesses identified their top target areas for growth as evolving their offering, for example by introducing new products or services (39%), introducing new technology (39%), and investing in their team, for example through training (36%).
The Business Barometer, which surveys 1,200 businesses monthly, provides early signals about UK economic trends both regionally and nationwide.
National picture
Overall UK business confidence in August remained unchanged from July at 50%.
Firms’ confidence in the overall economy increased two points to 47%, offsetting marginally weaker confidence in their own trading prospects, which fell two points month-on-month to 54% but remained above the long-term average.
The North East was the most confident UK nation or region in August (65%), followed closely by Scotland (64%).
Sector Insights
Output expectations for the various sectors remained at or near their three-year highs. Construction had a steep increase to 58%, up by 14 points, whereas other sectors experienced slight declines. Trading prospects for manufacturing dropped by 2 points to 58%, at the same level as construction, while Retail and Services fell to 53% down 7 and 3 points respectively.
Sam Noble, regional director for Wales at Lloyds Bank Commercial Banking, said:
“Welsh businesses still have ambitious plans to unlock new growth – whether that’s launching new services or upskilling teams. As they look ahead to new opportunities, we’ll remain by their side with our insight, tools and on-the-ground support.”
Hann-Ju Ho, Senior Economist, Lloyds Bank Commercial Banking, said:
“As in July we’ve seen a particularly strong outcome for business confidence. It remains at an elevated level of 50%, which is well above the long-term average of 29% – and it has been above the average for the past 15 months. Official GDP data for the first half of this year was encouraging and the survey results indicate that solid economic performance will likely continue as we move into the second half of the year.
“On a more cautious note, we have seen wage growth expectations pick up this month, although not enough to negate the downward trend so far in 2024.
“Overall, the economy looks to be stable and from the positive results recorded, businesses are echoing this sentiment.”
