Business confidence in Wales moved into positive territory in Q3 2025, bucking the UK trend, a survey of chartered accountants has found.
Sentiment tracked by ICAEW’s Business Confidence Monitor (BCM) for Wales for Q3 2025, published today (Tuesday 28 October 2025), found confidence had improved for the second quarter in a row, climbing out of negative territory and rising from – 3.7 to +0.9. Nationally, confidence stood at -7.3 on the index.
ICAEW said that uplift in confidence may be in part linked to the announcement of investment for Wales, with the Welsh Budget 2025/26 releasing an extra £1.6bn for public services. It added that the awarding of leases for floating offshore windfarms in the Celtic sea would likely provide a boost to the country’s energy sector and aid employment.
Businesses in Wales reported annual domestic sales growth of 2.3% in Q3 2025, below the UK and region’s historical averages of 3%. Welsh companies lifted their projections for domestic sales growth to 5.7%, significantly ahead of the national forecast of 4%. Wales recorded a decline in annual exports in the year to Q3 2025 with tariff announcements causing significant disruption. However, progress on several UK trade deals meant that companies in Wales raised their exports growth forecast to 4.7% for the year ahead. [1]
Annual input price inflation was slightly above the national figure, though businesses in Wales expect it to moderate significantly, albeit above the national figure. Consequently, Welsh companies saw a rise in selling price inflation for the first time since Q1 2024, likely to reflect businesses passing on to customers increases to operating costs, caused by April’s rise in employers’ National Insurance Contributions and the National Living Wage. Meanwhile, the tax burden was cited as being the biggest challenge in Q3 2025 by 57% of respondents, three times the region's historical average of 18%. Welsh businesses are much less concerned about regulations than elsewhere in the UK, which may also have contributed to the higher confidence score, ICAEW said.
Robert Lloyd Griffiths, ICAEW Director for Wales, said:
“This move into positive territory is good news for companies in Wales. Announcements of investment for Wales this year, such as the Welsh Budget 2025/2026 releasing an extra £1.6bn for public services in March, may have had an impact on businesses in the region.
“However, the tax burden continues to weigh on sentiment in Wales. As we await the Chancellor’s Budget next month, we hope governments at Cardiff and Westminster will work together to create the conditions for businesses to grow.”
Welsh businesses reported that profits growth increased for the second consecutive quarter in Q3 2025 to reach 4.7%, one of the strongest profit expansions of any part of the UK and more than double the UK average. [2]
Businesses in the region expect improved profits growth over the next 12 months, with an anticipated rise of 5.4% – higher than projected for all other UK regions and double the region’s historical average of 2.5%.
Companies in Wales have the most optimistic labour market outlook and plan to increase their staff levels by 3.6% over the coming year, compared to the region’s historical average and the rate forecast nationally, both 1.2%.
