Business confidence in Wales fell by 15 points during May to 23%, according to the latest Business Barometer from Lloyds.
Companies in Wales reported lower confidence in their own trading outlook month-on-month, down 11 points at 35%. When taken alongside their optimism in the economy, down 19 points to 11%, this gives a headline confidence reading of 23% (vs. 38% in April 2026).
Since May 2025, Wales has had an average overall business confidence of 42% with its largest figure of 76% in July last year and its lowest of 17% in November.
Looking ahead to the next six months, Welsh businesses identified their top target areas for growth as investing in their team, for example through training (45%), investing in sustainability (38%), and introducing new technology such as AI and automation (33%).
Nathan Morgan, Area Director for Wales at Lloyds, said:
“Confidence may have fallen this month, but with summer drawing near, many businesses across Wales will be about to enter their peak season. They're doing so with clear priorities to invest in their teams, new technology or sustainability measures, and we'll be there to support their ambitions.”
Overall, UK business confidence rose three points in May to 47%.
Firms' trading outlook rose four points to 58% and their optimism in the economy generally rose two points to 35%. Sixty-six percent expect stronger output over the year ahead, while 8% predict weaker activity.
The main drivers behind businesses expecting a decrease in activity remain the same as in April; economic uncertainty, higher cost pressures and weaker customer demand.
Business confidence rose across seven of the 12 UK regions and nations in May, and decreased in four. Northern Ireland saw notable gains with North East and West Midlands becoming the most confident regions.
Amanda Murphy, CEO for Lloyds Business and Commercial Banking, said:
“Business confidence edged up modestly in May, suggesting firms are beginning to steady after April's decline. This month, confidence levels from businesses in the North East particularly stands out. It's also reassuring to see that increased confidence from the construction sector has brought them more in line with their retail, services and manufacturing counterparts.”
