Nearly nine in 10 (89%) private business owners in Wales are confident about growth in 2026, according to KPMG’s annual Private Enterprise Barometer, 2% higher than the UK average of 87%.
The annual survey captured the perspectives of 1,500 privately owned businesses, including 110 in Wales, from across various industries including professional services, finance, technology, industrial manufacturing and retail.
Increased demand for products and services was identified as the main reason for this outlook, cited by 43% of Welsh businesses, while 42% highlighted plans to introduce new technology as another reason for optimism in the year ahead.
Technology also dominated as a leading investment priority for Wales-based businesses, with 39% identifying areas such as digital transformation as a key investment focus, followed closely by investment in artificial intelligence (38%), both in line with the UK averages.
Diversification is also high on the agenda for private businesses across Wales, with more than half of businesses (57%) looking to introduce new service lines and broaden their client offering.
Appetite for internationalisation is high, with 63% confirming that appetite for international expansion has grown in the last 12 months. 56% of respondents are also targeting new markets as a way to diversify over the next five years. Western Europe was identified as the most favoured location for expansion and trade amongst Wales businesses, with 53% citing the region as a priority.
The appetite for alternative funding options is strong, with nearly half (47%) of regional businesses now open to private equity investment, in line with the UK average. This reflects a willingness amongst firms to explore new sources of capital to support innovation and accelerate growth.
On M&A more broadly, 41% are open to opportunities but not actively seeking them. 36% are focused on internal growth only, while a further 28% are actively pursuing acquisitions.
David Williams, Wales and South West Regional Office Senior Partner at KPMG UK, said:
“Wales’ impressive confidence heading into 2026 puts it near the top of the leaderboard for this year’s survey. This optimism is being driven by real demand for products and services, combined with strategic investment in tech and diversification.
“More broadly, it’s a pivotal moment for Wales. Major investment and projects like the Celtic Freeport are creating genuine momentum. And businesses are responding by positioning themselves to capitalise.
“Ambition to enter new markets is particularly striking, with over half of respondents eyeing the prospect. Combined with Wales' growing strengths in renewable energy and infrastructure development, these businesses can be seen to be actively building the capabilities to deliver sustained growth.”
Seven in 10 of UK private business owners are looking to international trade to support growth plans and boost revenue over the next 12 months.
Western Europe was the most favoured destination for trade (46%), followed by Eastern Europe (40%). Over a third (34%) cited North America as a preferred trade destination, suggesting that UK firms managed the introduction of tariffs well in 2025.
Asia has become a greater focus for executives, with 27% now considering it for trade opportunities, up from 21% last year. The trade deal between the UK and India may have contributed to this increased interest.
The survey also found 87% of executives are confident about their growth prospects for this year. The main drivers for this optimism include increased demand for services, plans to introduce new technology and strategic growth initiatives. This figure is slightly lower than last year’s 92%, but it still presents an optimistic and ambitious outlook. Notably, the findings reveal that more than six in 10 businesses intend to enter new markets and launch new products and services.
When looking at challenges, businesses highlighted cost pressures and potential tax policy changes as barriers for growth. This year’s survey also found that 30% of private business owners had a positive outlook for the UK economy, compared to 42% last year. However, despite this, more than half thought revenues would rise by up to 5%, with 46% predicting a rise of the same amount in profits.
When it comes to planned investment areas over the next 12 months, AI emerged as the priority, overtaking technology as a whole, which led in the first survey last year.
Euan West, Head of Regions at KPMG UK, said:
“Confidence among business leaders remains strong, but there is an undercurrent of caution amid a subdued economic outlook for the UK and most other developed economies.
“While international expansion is on the agenda, the geopolitical environment remains volatile and unpredictable, which means the UK’s private enterprise and family business leaders and owners are having to take a pragmatic and adaptable approach.
“Against this backdrop the search for growth is one that requires strategic clarity, determination and agility and it’s encouraging to see business leaders making AI an investment priority.
“As ever, I am heartened and inspired by the can-do spirit of the private enterprise community.”
