Overall business confidence in Wales was the lowest in the UK in April, having dropped to minus one per cent, according to the latest Business Barometer from Lloyds Bank Commercial Banking.
While Welsh firms’ confidence in their own business prospects rose by six points to 12 per cent, when combined with their views on the economy overall confidence fell 11 points to minus one per cent – the lowest in the UK.
This was reflected in their hiring intentions, with a net balance of 14 per cent of businesses now expecting to hire more staff during the next year – down three points on last month.
Meanwhile, a net balance of 13 per cent of businesses across Wales said they feel that the UK’s exit from the European Union is having a negative impact on their expectations for business activity, up seven points on a month ago.
The Business Barometer questions 1,200 businesses monthly and provides early signals about UK economic trends both regionally and nationwide.
David Beaumont, regional director for Wales at Lloyds Bank Commercial Banking, said: “Uncertainty around the future of the Welsh economy is weighing on business confidence, dampening optimism across the country.
“However we have seen in the past how resilient Welsh businesses are, and with the right tools, knowledge and partners at hand, we’re confident that companies across the country can prosper.
“Whatever the future should hold, we’ll be by the side of Welsh businesses, which is why we’ve pledged £1.1 billion to help them achieve their ambitions for the coming year.”
National and sector picture
Across the UK, overall confidence climbed four points to 14 per cent as both optimism about the economy and confidence in business prospects continued to climb from lows recorded earlier this year.
Companies’ economic optimism rose to four per cent, while confidence in their own business prospects climbed three points to 23 per cent.
Businesses in the West Midlands are the most confident, at 28 per cent, ahead of the North West (20 per cent) and London (19 per cent).
Meanwhile, the overall confidence of firms in manufacturing, construction and services all improved across the UK – but retail sector confidence fell.
Manufacturing and construction confidence rose for the first time in three months, increasing six points to 16 per cent and two points to 15 per cent respectively. Services confidence increased by five points to 12%.
Meanwhile, the retail sector – which posted the highest confidence in March – fell this month by six points, placing it on a par with the manufacturing sector at 16 per cent.
Hann-Ju Ho, Senior Economist, Lloyds Bank Commercial Banking, said: “While business confidence remains low when viewed against the historic average, it is certainly encouraging to see an increase in overall optimism for the second month in a row.
“Firms appear more positive about both their own trading prospects and the broader economy, although their assessment of the potential impact of the UK leaving the EU remains unchanged. We will have to wait and see whether this partial rise converts into a sustained recovery.”