Wales Bucks National Trend With Rising Confidence In June

  • Business confidence in Wales rose six points to 43% in June
  • Firms’ optimism in their own trading prospects rose three points to 38%, while optimism in the economy climbed nine points to 48%
  • Overall UK confidence fell nine points to 41%, but remained above the long-term average

Business confidence Wales rose six points during June to 43%, according to the latest Business Barometer from Lloyds Bank Commercial Banking.

Companies in Wales reported higher confidence in their own business prospects month-on-month, up three points at 38%. When taken alongside their optimism in the economy, up nine points to 48%, this gives a headline confidence reading of 43% (vs. 37% in May).

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 (47%), evolving their offering, for example by introducing new products or services (43%), and investing in sustainability (26%).

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

Business Barometer

National picture

Overall UK business confidence fell nine points in June to a net balance of 41%. However, this was consistent with levels seen during Q1 2024, before the sharp rise in May, and remained above the long-term average (28%).

While businesses reported lower confidence in both their own trading prospects, down 10 points to 44%, and the economy, down seven points to 39%, both remained robust.

Yorkshire and the Humber (48%) was the most confident UK nation or region in June, closely followed by the North East of England (47%) and the East Midlands (46%).

 

Sector Insights

Results across the sectors were mixed in June as three of the four sectors saw a decline in trading prospects. Construction fell 16 points to 42% and there were other notable decreases in retail (down 14 points to 35%) and services (down 11 points to 46%). Manufacturing however, bucked this trend, increasing by two points to 51%.

Sam Noble, regional director for Wales at Lloyds Bank Commercial Banking, said:

“This month’s Business Barometer shows Wales is bucking the UK-wide trend.

“As businesses look to capitalise on greater confidence, it’s important that they keep a close eye on working capital. Rapid growth, which can come with new opportunities, may quickly tie-up funds in working capital, which can restrict business’ financial flexibility.

“Identifying working capital pressure points in advance and using specialist tools like invoice finance or asset-based lending, can unlock funds that can help fuel firms’ ambitions.”

 

Hann-Ju Ho, Senior Economist, Lloyds Bank Commercial Banking, said:

“These results suggest a slight drop in business confidence in June as firms’ trading outlook and economic optimism fell below levels seen in recent months. However, these results are still broadly in line with the positive readings we were seeing towards the start of the year.

“Fewer businesses indicated that their prices would increase in the next few months, which chimes with last week’s fall in inflation figures. Meanwhile, there was a mixed set of results seen across the sectors, but following last month’s increase, confidence fell in construction as well as retail and services”.