Welsh business confidence has rebounded after dipping in October as firms’ optimism about the wider economy returned, according to the latest Business Barometer from Lloyds Bank Commercial Banking.
Overall confidence reached 29 per cent in November, which is 23 points higher than October’s low of six per cent.
The jump was mainly driven by significant growth in economic optimism, which surged to 31 per cent this month, compared with a net balance of eight per cent who said they were pessimistic about the economy in October.
Welsh firms also reported increased confidence in their own business prospects at 28 per cent, seven points above last month’s figure of 21 per cent.
This rising confidence was reflected in companies’ hiring intentions, with a net balance of 29 per cent of businesses across the nation expecting to create more jobs in the next year, up 19 points on last month.
Nationally, a net balance of one per cent of Welsh companies said they felt that the UK’s exit from the European Union was having a negative impact on their expectations for business activity, 15 points lower than a month ago.
Across the UK, overall confidence bounced back, climbing five points to 24 per cent as firms’ optimism about the economy rose nine points to 17 per cent. Companies’ confidence in their own business prospects rose two points to 31 per cent.
The Business Barometer questions 1,200 businesses monthly and provides early signals about UK economic trends both regionally and nationwide.
David Beaumont, regional director for Lloyds Bank Commercial Baking in Wales, said:
“It’s great to see Welsh business confidence and hiring plans bouncing back after taking a knock in October.
“Many firms will now be hoping to receive some clarity on what our relationship with the EU will look like before the end of the year.
“Even if they do, 2019 will not be without its challenges, and it’s vital that firms plan carefully to ensure that they can successfully navigate any issues that the year ahead may bring.”
Businesses in Yorkshire showed the most confidence, at 43 per cent, ahead of the West Midlands (39 per cent) and London (34 per cent).
Those in the East Midlands were the least confident, with an overall confidence of 10 per cent, 14 points below the national average.
Firms in the manufacturing sector saw the largest increase overall, rising by 11 points to 32 per cent, while construction also registered a significant improvement of seven points to 29 per cent.
Retail confidence edged up by one point to 30 per cent, while other services rose five points but still continued to lag behind other sectors at 20 per cent.
Concerns about the impact of leaving the EU were the highest in manufacturing and other services.
Hann-Ju Ho, Senior Economist, Lloyds Bank Commercial Banking commented:
“Following last month’s dip, with business confidence reaching its lowest level since August 2017, it is reassuring to see that business confidence has picked up, helped by stronger economic optimism and hopes of a Brexit deal.”