Overall business confidence in Wales has risen 12 points to 10 per cent, its highest level during 2019, according to the latest Business Barometer from Lloyds Bank Commercial Banking.
Companies in Wales, surveyed between 1st and 15th March, reported a 26 point rise in economic optimism to 12 per cent, while firms’ confidence about their business prospects slipped five points to six per cent. Together, these give an overall confidence of 10 per cent, the highest since December 2018.
This upturn was reflected in hiring intentions, with a net balance of 17 per cent of Welsh businesses now expecting to hire more staff during the next year – an increase of 18 points since last month.
Across the UK, overall confidence climbed six points to 10 per cent as firms’ optimism about the economy and confidence in their own prospects bounced back from February’s lows.
Companies’ confidence in their own business prospects rose seven points to 20 per cent but firms are now evenly split on whether they feel optimistic or pessimistic about the economy.
The Lloyds Bank Business Barometer questions 1,200 businesses monthly and provides early signals about UK economic trends both regionally and nationwide.
David Beaumont, regional director for Wales at Lloyds Bank Commercial Banking, said:
“These figures make for encouraging reading. Given ongoing uncertainty at home and abroad, the fact that business confidence is growing is testament to the resilience of businesses across the country.
“Whatever the future may bring, we’ll be by the side of Welsh businesses, and we have pledged to lend up to £1.1 billion in the coming year to help them achieve their ambitions.”
Across Wales, a net balance of six per cent of businesses said they felt that the UK’s exit from the European Union was having a negative impact on their expectations for business activity, down five points on a month ago.
National and sector overview
Businesses in Yorkshire were the most confident, at 21 per cent, ahead of the East Midlands (18 per cent) and London and the West Midlands (both at 17 per cent).
Those in Scotland were the least confident, with an overall confidence reading of minus three per cent, 13 points below the national average.
The overall confidence of businesses in the retail sector rose by eight points to reach a four-month high of 22 per cent. Services made an 11-point improvement to seven per cent, but continued to lag behind other sectors.
However, the overall confidence of manufacturing and construction firms fell for a second month, to 10 per cent and 13 per cent respectively, suggesting the outlook in both sectors has dimmed since the start of the year.
Hann-Ju Ho, Senior Economist, Lloyds Bank Commercial Banking said:
“The strengthening of confidence in the first half of this month provides some solace in light of recent pessimism, and there has been a slight improvement in firms’ expectations about the impact of the UK’s departure from the EU.
“However, levels remain below the long-term average and continue to show volatility as political negotiations continue.”