Business confidence in Wales declined in May while being up slightly for the UK as a whole

Business confidence in Wales has fallen compared to a slight rise for the UK as a whole, shows latest research from Lloyds.

According to the bank’s business barometer for May, companies in Wales reported lower confidence in their own trading outlook month-on-month, down 11 points at 35%. When taken alongside their optimism in the economy, down 19 points to 11%, this gives a headline confidence reading of 23% – compared to 38% in April.

Since May last year Wales has had an average overall business confidence of 42% with its highest level of 76% in July last year and its lowest of 17% in November.

Looking ahead to the next six months, Welsh businesses identified their top target areas for growth as investing in their team, for example through training (45%), investing in sustainability (38%), and introducing new technology such as AI and automation (33%).

Overall, UK business confidence rose three points in May to 47%. Business confidence rose across seven of the 12 UK regions and nations in May, and decreased in four. Northern Ireland saw notable gains with north east and west Midlands being the most confident regions.

Nathan Morgan, area director for Wales at Lloyds, said: “Confidence may have fallen this month, but with summer drawing near, many businesses across Wales will be about to enter their peak season. They’re doing so with clear priorities to invest in their teams, new technology or sustainability measures, and we’ll be there to support their ambitions.”

Amanda Murphy, chief executive of Lloyds Business and Commercial Banking said: “Business confidence edged up modestly in May, suggesting firms are beginning to steady after April’s decline. This month, confidence levels from businesses in the north east particularly stands out. It’s also reassuring to see that increased confidence from the construction sector has brought them more in line with their retail, services and manufacturing counterparts.

“Across the UK, each region and nation presents unique opportunities and drivers of growth. We’ve seen first-hand what the right financial support and advice can do for ambitious businesses and are keen to continue supporting our customers as they grow – helping Britain prosper.”