Business confidence in Wales rose 10 points during August to 54%, according to the latest Business Barometer from Lloyds, its first time outpacing the UK average in 2026.
Companies in Wales reported higher confidence in their own trading outlook month-on-month, up 10 points at 65%. When taken alongside their optimism in the economy, up 10 points to 43%, this gives a headline confidence reading of 54% (vs. 44% in July 2026).
Wales firms' confidence in their own trading outlook and the economy both rose by 10 points, driving the overall improvement in business confidence.
A net balance of 65% of businesses in the region also expect to increase staff levels over the next year, up 61 points on last month.
Business confidence in Wales still sits above the 12-month average of 35%, with its highest figure of 57% in October 2025.
Looking ahead to the next six months, Wales businesses identified their top target areas for growth as entering new markets (56%), investing in their team, for example, through training (51%), and evolving their offering, for example by introducing new products or services (46%).
The Business Barometer, which surveys 1,200 businesses monthly and which has been running since 2002, provides early signals about UK economic trends both regionally and nationwide.
Nathan Morgan, Area Director for Wales, at Lloyds, said:
“It's encouraging to see confidence among Welsh businesses strengthen again in August, with firms feeling more positive about their own trading outlook and the wider economy.
“Particularly notable is the strong rise in the number of businesses expecting to grow their workforce over the next year, which points to ambition across the region.
“As firms look to reach new markets, invest in their people and develop their offering, having the right support and finance in place will be important in helping them turn their optimism into growth.”
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Overall, UK business confidence increased four points in August to 53%, the highest reading since the start of the Middle East conflict in March (55%) and above the 12-month average of 47%.
This was driven by a second month-on-month increase in economic optimism, up 18 points since June.
Optimism in the wider economy rose seven points to 49%, compared to a 12-month average of 37%. Of those surveyed, 64% said they were optimistic (up five points from July) in the wider economy, while those who felt pessimistic decreased by two points to 15%. The main factors cited by firms who felt more positive included stronger customer demand and improving financial conditions.
Businesses' own trading outlook improved two points to a three-month high of 58% in August, compared to a 12-month average of 56%. Sixty-six percent of firms (up one point from July) expect an increase in output over the year ahead, while those expecting a decrease in activity reduced by one point to 8%. Among firms expecting stronger activity, the main factors were stronger customer demand, increased investment in capacity or tech and improved supply chain conditions.
Amanda Murphy, CEO Lloyds Business and Commercial Banking, said:
“It's encouraging to see business confidence rise for the second month in a row, reaching its highest level since March.
“While international firms remain more confident, it's good to see domestic companies register a strong month-on-month increase.
“Overall, businesses are reporting stronger customer demand, greater optimism about the wider economy and growing confidence in their own trading outlook, all of which will be helping to support investment and growth plans.
“While businesses continue to operate in a challenging environment, easing cost pressures and fewer firms expecting to raise prices in the coming year, should allow them to focus less on managing headwinds and more on pursuing growth.”
