More Welsh firms are planning to hire new staff as confidence grows

More Welsh firms are planning to hire new staff after business confidence rose eight points during May, the latest Business Barometer from Lloyds Bank Commercial Banking has found.

Companies across Wales reported an overall confidence figure of 30 per cent, compared with last month’s figure of 22 per cent.

This was due to firms across the nation reporting a four point increase in confidence in their business prospects, at 28 per cent, and an 11 point rise in economic optimism at 31 per cent.

As a result, a net balance of 34 per cent of businesses now expect to hire more staff in the next 12 months – up 20 points on last month.

Across the UK, overall confidence climbed three points to 35 per cent, as firms’ confidence in their own business outlook rose even though their optimism about the economy slipped.

The Business Barometer questions 1,200 businesses monthly and provides early signals about UK economic trends both regionally and nationwide.

Andrew Kemp, regional director for Wales at Lloyds Bank Commercial Banking, said:

“It’s positive to see that confidence across Wales is rising, following last months’ dip in optimism.

“This boost has prompted more businesses to plan to recruit more staff, which is particularly encouraging for the local economy.

“Although the rise in sentiment is heartening, companies need to remain realistic about their prospects. Regularly revisiting and adapting their business plans will make firms better equipped to capitalise on new opportunities or navigate potential challenges.”

Across Wales, a net balance of five per cent of businesses said they felt that the UK’s exit from the European Union was having a positive impact on their expectations for business activity. This compares with a net balance of five per cent who thought it was having a negative effect a month ago.

Regional picture

Overall confidence was highest among businesses in the West Midlands, at 58 per cent, followed by London (52 per cent) and the South West (41 per cent).

Businesses in the East of England were least confident, with an overall confidence of 13 per cent, 22 points below the national average.

Sectors

Overall confidence was strongest in the communications sector, at 50 per cent. Transport and business and finance were the next most confident, at 43 per cent, although that level represented a fall in both sectors.

Retail confidence bounced back strongly as the weather improved in May, rising 23 points to 38 per cent, although manufacturing fell seven points to 33 per cent.

Weakest confidence was in the mainly public sector at 21%.

Hann-Ju Ho, senior economist at Lloyds Bank Commercial Banking, said:

“Business confidence is rising across the UK and most firms appear to be brushing off the economic slowdown in the first quarter, with national levels hitting a four-month peak in May.

“As EU negotiations enter a critical stage, it’s interesting to see that more than a third of firms across the UK anticipate Brexit will have a positive impact on their business activity.”