As the new financial year approaches, we ask key business people in Wales what industry sectors they think will flourish in 2017.
Karen Thomas | Head of Business & Corporate Banking
A range of major infrastructure projects in Wales such as The Central Square regeneration, Wylfa power station and the Swansea Bay Tidal Lagoon will see continued growth in the Construction sector. Many of the projects will last several years & availability of skilled labour will be a key consideration for many business owners.
With great locations (2 hours from London) and skilled work force Wales has a culture of creativity and entrepreneurship. It’s a diverse sector comprising of Film, Digital Media and software and one where we have a renowned university system with 5000 creative graduates looking for roles.
A recent rise in incubators will ensure that we continue to encourage entrepreneurship which is necessary for the longevity of the Welsh economy.
Businesses will continue to focus on cost reduction with energy costs playing a large part. The proposed Swansea Bay Tidal Lagoon will continue to keep this sector high on the agenda
Hospitality and Leisure
An increase in Staycations (due to the weak pound & recent terrorism events) should help to support growth in the H & L Sector through 2017. Good quality assets, new products and beautiful countryside (not to mention the forthcoming UEFA Champions League Final) should see more tourists visiting Wales.
Alistair Wardell | Lead Partner
One of the advantages of the current economic scene in Wales is its diverse sectors. From Life Sciences to Tourism, from Creative Industries to Construction and from Manufacturing to Energy & Environmental, we have a rich plethora of commercial activity driving our economy. One of the notably strong sectors is Food & Beverages, providing employment for over 22,000 people and with a combined turnover of £4.8bn. My personal interest is in the burgeoning niche sectors of the Food & Beverage market, notably those with a penchant towards healthy produce as I believe more consumers want a wholesome and beneficial choice about the meals and snacks they are choosing. Many Welsh businesses are already ahead of the game with this concept. Take a look at Brighter Foods with their nutritious Trail bars, Ultrapharm trading globally with their gluten free products and Calbee pioneering baked pea snacks, as opposed to fried crisps. The growing importance of such niche brands is one I watch with interest, together with the rising trend of F&B manufacturers developing products designed to tackle the problem of eliminating food waste. Whilst big brands and household names will always have their place, changing consumer tastes means select choices are becoming highly favourable and I believe this niche market has potential for growth and innovation in 2017 and beyond.
Matthew Sutton | Corporate Director
The life sciences sector is undoubtedly one of the biggest key growth industries in Wales and is set to continue its period of growth in 2017.
The Secretary of State for Business, Energy and Industrial Strategy announced a £229m investment in the development of new cutting edge materials. The strategy which will look to build on the shared interests of England, Scotland, Wales and Northern Ireland intends to make the UK the best place in the world to invest in life sciences.
Renewable energy is also a key growth industry and with many exciting projects in the pipeline it’s expected that it will continue to flourish. The recently assented Wales Act 2017 for example is set to give the Welsh Government more powers with regards to the energy sector. The Swansea Bay Tidal Lagoon project is also an exciting prospect which could establish Wales as a leader in sustainable energy.
Mark Hindmarsh | Director
Whilst 2016 was a tough year and left many uncertain of what post-Brexit and 2017 will bring, there were some bright points that emerged for some Welsh industry sectors, bright points which make prospects for the year ahead look positive:
- The Digital Economy
In late 2016, Nockolds the law firm, commissioned a report and found Wales to be the ‘fastest growing” digital economy outside London. This year we will continue to see the number of digital start-ups that are establishing themselves across the Welsh regions increase. Digital businesses ranging from software and App development through to game creation and IT consultancy are beginning to attract attention and investment from outside of Wales. If nurtured and supported the result will create new business opportunities and further jobs.
- Tourism & Hospitality
According to the Welsh Government tourists spend around £14 million a day whilst in Wales, putting around £5.1 billion a year into our economy. Encouraging more people to visit our beautiful country will help fuel growth and show people from outside, that Wales has a lot to offer whether you come for pleasure, leisure or to do business. Visit Wales continues to do a great job and their recently launched ‘Year of the Legends’ 2017 campaign will hopefully bring more visitors over the Severn bridge.
- Energy & Environmental
Wales still has an opportunity to lead the world in the development of large scale, clean and efficient renewable energy. The Swansea Bay Tidal Lagoon must become a reality this year and when it does it will prove the catalyst for a new industry which harnesses our natural resources to power future Welsh generations to come, just as coal did so for so long.
Huw Pryce | Operations Director
The Technology industry in Wales is more buoyant than ever. As we enter the 2017 – 2018 Financial Year, the Welsh Information Technology market shows no signs of slowing down. Even with the advent of Brexit, market conditions remain buoyant and IT skills are more sought after than ever. As a proud Welsh Technology Recruitment Business, the CPS Group are enjoying unprecedented job flow across our permanent and contract business. All the indicators suggest that the new financial year will see the continuation of this positive trend, with the established technology client base in Wales now having to compete for skilled talent with new business start-ups and inward investors.
What’s hot for 2017/18?
- Open Source/Mobile Development – With more and more applications moving towards Open Source and mobile platforms, we will see an increase in demand for these skills. Developers are very hot property in South Wales and the well documented skills gap in this space still drives fierce competition for the top talent in the market. Key skills we are seeing a steady increase in demand are languages such as Java and Scala.
- AI & Process Automation – A huge spike in this market has led to multiple start-ups across Wales. In 2016, the CPS Group have engaged with a number of start-ups who are in aggressive growth mode. We are at the start of a generational shift in work practices and job roles. The AI revolution will lead to a change in skillset across the Information Technology landscape that is scary and exciting for employers in equal measure. Without a doubt, progression in this area will see the single biggest change to the UK workforce in the last 15 years.
The Welsh Technology market is evolving at a rapid rate in Wales. Businesses are having to provide an innovative approach to ensure that their Employer Value Proposition attracts and very importantly, retains the best talent. With little tangible evidence of the IT skills gap narrowing in Wales, we must share responsibility and take positive action to create a highly skilled IT workforce to attract future inward investors.
Alex Parr | Managing Director
Here at Wolfestone, we have seen a huge increase in Welsh companies requesting translations into languages other than Welsh over the last six months. The main growth is coming from the biotechnology and pharmaceutical sector as well as from companies who are diversifying into green energy solutions.
For 2017/18, manufacturing is another industry sector that is likely to continue benefiting from the drop in the pound and Wales is well placed within the advanced manufacturing sector to see substantial success. Many Welsh companies are currently employing less than 10 people and are going through a rapid period of growth.
Generally speaking, globalisation is having a huge effect on businesses of any size, and judging from the 23% increase in website translation and marketing material for our clients based in Wales, the funding from UKTI and Welsh Government is having a positive impact on Welsh exporters from a range of industry sectors.
Elaine Ballard | Chief Executive
The obvious answer for me is construction. The regeneration of Central Square is already taking shape, and with the ambitious targets in the Local Development Plan for new homes, as well as the Metro project in the City Deal, construction skills will be in demand. Alongside this, in the social housing sector, we have been challenged to build 20,000 homes across Wales in the next four years. In 2015/16 Housing Associations spent £1,970m on building and improving homes, supporting over 23,000 jobs directly and indirectly – further investment in the building industry is good news for the economy.
Another sector where there is potential to grow is in services for older people. At Taff, we’re trying to re-imagine what this might look like, rather than stick to the traditional domiciliary or residential care solutions. Baby boomers are going to want something much more bespoke and flexible. We see collaborative partnerships, ‘brokering’ and co-ordinating services being of value to this generation and will be looking at options in the next two years.
Wendy Weber | Head of Workforce Skills
As a provider of education and training, we are focussed on the Welsh Government priority growth sectors in Food Manufacturing, Marine and Engineering. In Pembrokeshire, we are pleased to hear that the proposed Food Park in Haverfordwest has been given initial approval and eagerly await the Welsh Government response to the Hendry Review into the proposed Tidal Lagoon. It is clear that Wales has a gap in the number of skilled engineers needed for a project of this magnitude, especially when we also consider the vast numbers needed at Hinckley Point and for the proposed HS2 project. Engineering companies need support to grow the number of employees they can take on and train to meet future needs in Wales.
Mark Woloshak | Senior Associate
Solicitors’ clients grow increasingly sophisticated and this combined with IT means that they are more likely to use firms from outside their local area than previously. We at Slater & Gordon are noticing that we are acquiring more clients from other parts of the UK and abroad. The cost of legal services in Cardiff and the rest of Wales represent good value when compared to the rest of the UK. This combined with the quality of the services provided should enable the Welsh legal sector to flourish, notwithstanding the large number of threats facing the legal profession nationally.
Elsewhere, the low value of sterling and uncertainty surrounding Brexit, is likely to encourage people to stay in the UK for their holiday. This is likely to benefit the Welsh tourism industry in 2017. Similarly, companies who export principally outside the E.U. should benefit as well.