Business confidence in Wales rose 21 points during May to 36%, according to the latest Business Barometer from Lloyds.
Companies in Wales reported higher confidence in their own business prospects month-on-month, up 28 points at 52%. When taken alongside their optimism in the economy, up 14 points to 21%, this gives a headline confidence reading of 36% (vs 15% in April).
A net balance of 23% of businesses in the country also expect to increase staff levels over the next year, up 28 points on last month.
Looking ahead to the next six months, Welsh businesses identified their top target areas for growth as introducing new technology, such as automation or AI (45%), entering new markets (39%), and evolving their offering, for example by introducing new products or services (35%).
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.
National picture
Overall, UK business confidence increased 11 points in May to 50% – its highest level since August 2024.
Firms’ optimism in their own trading prospects strengthened six points to 56%, while their confidence in the wider economy also climbed 16 points to 44%.
The East Midlands was the most confident UK nation or region in May (66%), followed closely by the North East (65%).
Sector Insights
Construction firms’ confidence rose to a nine-month high of 56%, while those in the service sector reported a one-year high of 54%. Manufacturing confidence also rose by two points to 40%. However, retail confidence fell by five points to 40%, the lowest level since January this year.
Sam Noble, regional director for Wales at Lloyds, said:
“It’s great to see business leaders in Wales increasingly confident about their prospects and the wider economy.
“Firms up and down the country are setting out clear plans to drive further growth, from investing in technology or launching new products or services, and we’ll be ready with our support to help them take the next steps on their journey.”
Hann-Ju Ho, Senior Economist, Lloyds Commercial Banking, said:
“The rebound in business confidence suggests that firms might be in a stronger position for the next quarter. The rise in confidence is driven by a sharp increase in economic optimism, reflecting the recovery in financial markets amid more promising prospects for potential global trade agreements.
“Equally as encouraging is the fact that trading prospects, wage expectations and hiring intentions also saw improvements this month. The positive trends in these metrics are important signals for potential growth and resilience in the business community and the wider economy. While we know that fluctuations do occur month on month and the global economic outlook remains uncertain, this month’s increase in confidence is an encouraging sign.”
