Business confidence in Wales has increased, according to the latest research from Lloyds Bank, but it still lags behind the overall UK rate. The bank's business barometer for April reveals that companies in Wales reported unchanged confidence in their own trading outlook month-on-month at 46%. Combined with a 16-point rise in optimism about the economy to 30%, the headline confidence reading stands at 38%, up from 30% in March. Any reading above zero is considered positive.
Year-on-Year Growth Leads UK Regions
Wales recorded the largest year-on-year confidence growth among all UK nations and regions, and it was the only area to report both year-on-year and month-on-month growth. A net balance of 34% of Welsh businesses expect to increase staff levels over the next year, a rise of nine points from last month.
Top Growth Areas for Welsh Firms
Looking ahead to the next six months, Welsh businesses identified their top target areas for growth as investing in their team through training (48%), introducing new technology such as AI or automation (42%), and evolving their offering by introducing new products or services (40%).
UK-Wide Confidence Falls
Overall, UK business confidence fell 11 points in April to 44%. Firms' confidence in their own trading outlook dropped six points to 54%, while optimism in the wider economy fell 17 points to 33%. The East Midlands was the most confident UK region at 43%, followed by London at 51% and the West Midlands at 49%.
Expert Commentary
Nathan Morgan, area director for Wales at Lloyds, said: “Wales is bucking the UK-wide trend when it comes to business confidence, increasing during April against the national trend. This confidence is the result of Welsh firms’ ongoing focus on investment to protect their position against future disruption. At Lloyds, we’ll continue to nurture this recent momentum of growth by working with businesses across the nation to equip them with the financial tools they need.”
Amanda Murphy, chief executive for Lloyds Business and Commercial Banking, added: “Businesses told us their confidence fell as inflation pressures re-emerged, global uncertainty persisted and costs remained elevated. While sentiment declined, it remained above the long-term average, with nearly two-thirds expecting stronger output in the coming year. UK businesses are resilient and adept at deploying strategies to defend growth in uncertain conditions. Over the past month, we’ve seen them opt for flexibility wherever possible. They’re building contingency into their short and medium-term plans, rather than expecting a rapid return to normal. Protecting margins has become more important. That means tougher cost scrutiny and a greater focus on balancing growth with profitability. In this environment, as with other recent market disruptions, we continue to observe that sustainable success comes from discipline, resilience and clarity about what really drives long term value.”
