Business confidence in Wales was the joint-highest of any UK nation or region in July, 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 24 points at 62%. When taken alongside their optimism in the economy, up 14 points to 62%, this gives a headline confidence reading of 62% (vs. 43% in June) – the joint-highest reading in July, alongside the East Midlands (62%).
A net balance of 45% of businesses in the region also expect to increase staff levels over the next year, up 29 points on last month.
Looking ahead to the next six months, Wales businesses identified their top target areas for growth as evolving their offering, for example by introducing new products or services (45%), investing in their team, for example through training (42%), and introducing new technology (38%).
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 climbed nine points in July to a net balance of 50% – the same as in May when confidence reached an eight-year high.
Businesses’ confidence in their own trading prospects rose 12 points to 56% – the highest reading since April 2017. Meanwhile, confidence in the economy climbed six points to 45%.
Sector Insights
There was an improvement across all sector categories this month – most notably in retail which rose by 25 points to a post-pandemic high of 60%. There were also significant gains in manufacturing trading prospects, with the net balance increasing by 9 points to a two-year high. Services rose 10 points to 56%, while construction saw a more modest increase by 2 points to 44%.
Sam Noble, regional director for Wales at Lloyds Bank Commercial Banking, said:
“Wales is now leading the UK in business confidence – a testament to the resilience and creativity of our country’s business community.
“Management teams will be looking to capitalise on this sentiment. As they do so, it’s critical that they keep tight control over working capital. This will ensure they are able to quickly make the most of new opportunities as they arise – whether that’s quickly developing and launching new products, or investing in new technology.”
Hann-Ju Ho, Senior Economist, Lloyds Bank Commercia Banking, said:
“This month shows that businesses are feeling more confident, buoyed by their positive trading prospects and economic outlook. Retail-focused businesses were the main driving force behind the positive rise in trading prospects and these results tally with the improvement we have seen in consumer confidence.
“With the data suggesting that businesses may have taken a more cautious approach in June, next month will be one to watch to see if the renewed sense of optimism continues.”