Businesses in Wales have identified opportunities for growth and increased investment in equipment in Q3, but persistent concerns around taxation, labour costs and inflation remain.
Chambers Wales South East, South West and Mid’s latest Quarterly Economic Survey suggests that more than half (51%) of businesses in Wales see new markets as an opportunity to recover and grow in the next three months. 42% of businesses surveyed say that they currently trade with countries inside and outside of the EU.
There is some wariness around trading with the USA, with 39% reporting that tariffs have or will have a negative impact on their business, but there is more optimism regarding improved trade with the European Union with 45% stating that reduced trade friction with the EU would have a positive impact on their business.
David Peña, Director of International Trade at Chambers Wales South East, South West and Mid, said:
“The EU is a primary export market for Welsh goods and services. It appears that the UK-EU summit and reset deal earlier this year is giving businesses in Wales more confidence that the trading relationship between the two markets will improve and contribute to business growth.
“Understanding how to navigate the EU’s legal, financial and structural requirements is key to success when trading. Through training and partnerships with European organisations and chambers of commerce, we are acting to support members who currently trade with the EU and those who plan to do so in the future.”
Another opportunity identified by businesses in Wales was new product innovation. To support this goal, there was an increase in investment plans for plant, machinery, tech and equipment in Q3 2025. 37% increased their investment in this area over the last three months, compared to 23% in Q2.
However, persistent concerns remain. Three quarters of Welsh businesses report that labour costs put their organisation under pressure to raise their prices, while 64% state that taxation is the external factor causing their business the most concern.
As inflation continues to rise and remains above the Bank of England’s target of 2%, this concern has also risen for businesses in Wales. 57% of respondents highlighted that inflation was more of a concern this quarter than it was three months ago, rising from 38% in Q2.
Gus Williams, CEO of Chambers Wales South East, South West and Mid, said:
“Plotting the future and planning for growth is difficult as the UK and global economies face complex challenges. Welsh businesses, though cautious, appear to be moving forward by identifying and investing in opportunities that will positively impact them.
“Concerns around taxation and further pressures on labour costs such as wages are regular features within our Quarterly Economic Surveys and Q3 was no different. Businesses will be looking to the November Budget for a confidence boost with some trepidation, with the hope that the announcements made will not add to existing burdens.”
