Business confidence in Wales rose in June but remains below the UK as a whole, according to the latest research from Lloyds Bank. Its business barometer shows companies in Wales reported higher confidence in their own trading outlook month-on-month, up 13 points at 48%. When taken alongside their optimism in the economy, up five points to 16%, this gives a headline confidence reading of 32% (up from 23% in May). For the UK as a whole, overall confidence was down 3% to 44%.
Key drivers of confidence
Welsh firms reported strong customer demand (89%) as the key driver of confidence in their own trading outlook. A net balance of 20% of businesses in the country also expect to increase staff levels over the next year, up two points on last month. Business confidence in Wales now sits below the 12-month average of 42%, with its highest figure of 76% in July last year.
Growth plans for the next six months
Looking ahead to the next six months, Welsh businesses identified their top target areas for growth as introducing new technology such as AI or automation (52%), entering new markets (36%) and investing in their team, for example through training (33%). Nathan Morgan, area director for Wales at Lloyds, said: “It’s encouraging to see confidence among Welsh businesses rise this month, with firms feeling more positive about their own trading outlook and the wider economy. That optimism is being backed by clear plans for growth, with businesses looking to embrace new technology, enter new markets and invest in their teams. With hiring intentions also edging up, there are positive signs of momentum across Wales. We’ll continue to support Welsh businesses as they adapt and pursue new opportunities.”
Regional and UK context
Business confidence rose across six of the 12 UK regions and nations in June, with the south west of England seeing the biggest improvement on May, up 22% to 44%. The East Midlands had the highest headline confidence reading of 56%. On the UK position, Amanda Murphy, chief executive for Lloyds Business and Commercial Banking, said: “Confidence has edged down this month, and that reflects what we’re hearing directly from businesses. Many are still dealing with a mix of higher costs, uncertain demand and a wider global backdrop that feels difficult to read. That is weighing on decision making, particularly for firms that are focused on the UK market and have fewer ways to offset those pressures. However, this is not a picture of businesses stepping back altogether. Trading outlook remains relatively steady and we continue to see firms looking for new opportunities, even if investment plans have become more cautious. Businesses have shown over time that they can adapt in tough conditions, but for many the priority is managing costs and maintaining stability rather than pushing for growth.”
