Welsh businesses to create jobs despite slight fall in confidence

Business confidence in Wales fell two points during December to 8%, according to the latest Business Barometer from Lloyds Bank Commercial Banking.

Companies in Wales report lower confidence in their business prospects at 5% and higher economic optimism at 9%, giving an overall confidence reading of 8%.

Businesses’ hiring intentions showed that a net balance of 9% of businesses in the region expect to hire more staff during the next year, up one point on last month.

Across the UK, overall confidence edged up one point to 10% as firms’ confidence in their own prospects rose six points to 18%, although their optimism in the economy fell to 2%.

The Business Barometer questions 1,200 businesses monthly and provides early signals about UK economic trends both regionally and nationwide. This month’s survey was carried out before the result of last week’s General Election was known.

Amanda Dorel, regional director for Wales at Lloyds Bank Commercial Banking, said: “Although it’s disappointing to see overall confidence fall slightly in December, the country’s businesses enter 2020 planning for growth and intending to hire more staff.

“As they do, we will remain firmly by their side and are committed to continue backing Welsh businesses, supporting their growth ambitions and helping Britain thrive.”

Across the region, a net balance of 6% of businesses said they felt that the UK’s exit from the European Union was having a negative mpact on their expectations for business activity, down four points on a month ago.

Regional picture

Businesses in the West Midlands had the highest confidence for the third month running, at 23%, ahead of the East Midlands at 18%, and London at 16%. Those in East of England were the least confident, with an overall confidence of -2%, 12 points below the national average.

UK overview

In December, overall business confidence saw a marked improvement in the manufacturing sector, increasing 17 points to 27%. Confidence in the retail sector increased by one point to 22%, while confidence in the service sector stayed broadly steady at 4%. The construction sector saw a slight decrease of four points to 16%.

Hann-Ju Ho, senior economist for Lloyds Bank Commercial Banking, said: “As we come to the end of what has undoubtedly been a turbulent year, it is encouraging to see sustained increases in overall business confidence and the sharp improvement in manufacturing confidence.

“There is now clarity over the UK’s departure from the EU, but the focus will turn to whether a new trade agreement can be negotiated during the transition period which currently runs until the end of next year.”