Business confidence in Wales rose one point during September to 36%, according to the latest Business Barometer from Lloyds Bank Commercial Banking.
Companies in Wales reported higher confidence in their own business prospects month-on-month, up one point at 36%. When taken alongside their optimism in the economy, down one point to 27%, this gives a headline confidence reading of 36% (vs. 35% in August).
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 (56%), investing in their team, for example by hiring new employees (38%), and entering new markets (26%).
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 September dipped slightly, to 47% down from August’s 50%.
Though there was a marginal increase in their own trading prospects (up two points month-on-month to 54%), firms’ confidence in the overall economy dropped nine points to 38%.
The joint-most confident regions in the UK were the West Midlands and London, both reporting overall confidence of 59%. Only Northern Ireland, Wales, London, the South West and North West reported an increase in overall confidence.
Sector Insights
Projections for output were mixed across the sectors, with some showing significant changes from previous results. In construction, the sharp increase last month was largely counteracted by a drop in expectations in September, falling by 12 points to 46%.
Similarly, in manufacturing, trading prospects fell for a second month to 53%, although this figure is still stronger than the year-on-year figure. However, the falls in manufacturing and construction sectors were more than offset by a small rise in retail and a bigger rise in the dominant service sector.
Sam Noble, regional director for Wales at Lloyds Bank Commercial Banking, said:
“While this month’s increase in confidence was small, Welsh businesses continue to show optimism, with more firms looking to evolve their offering by introducing new products and services.
“If businesses are going to pave the way for growth, they need solid working capital and the appropriate resources in place. We’ll continue to be by their side as they strive to turn their plans into action.”
Hann-Ju Ho, Senior Economist, Lloyds Bank Commercial Banking, said:
“Although overall confidence fell this month, that fall was from a nine-year high and businesses remain positive about their own trading prospects. The joint-highest result this year could suggest that respondents still see a positive future for their own companies, which is also reflected in the largely unchanged employment figures.
“The more mixed picture for economic optimism points to some businesses maintaining a degree of caution. While we still expect economic expansion, it may occur at a slower rate than the first half of 2024.”
