Companies in Wales reported the highest levels of confidence in their own business outlook for six months during August, according to the latest Business Barometer from Lloyds Bank Commercial Banking.

Asked about prospects for their own business, 30 per cent said they expect trading to increase in the next 12 months, up 20 per cent on July.

Overall business confidence in Wales also rose by five points during August to 22 per cent.

That optimism impacted employment forecasts, with 14 per cent of firms expecting to increase staffing levels in the next year, up four points on last month.

However, despite individual optimism amongst Welsh businesses, confidence in the wider economy fell nine points to 14 per cent.

A net balance of nine per cent of businesses said they felt that the UK’s exit from the European Union was having a negative impact on their expectations for business activity. This compares to July, when a net balance of 5 per cent of firms said Brexit was having a positive effect

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

Across the UK, overall confidence fell by six points to 23 per cent as firms’ optimism about the economy dropped eight points to 17 per cent. Businesses’ confidence in their own business prospects dropped five points to 29 per cent.

David Beaumont, regional director for Wales at Lloyds Bank Commercial Banking, said:

“It’s extremely encouraging to see that business owners in Wales are becoming more confident in their commercial prospects and are taking an assured approach towards their growth plans. “For firms to realise their ambitions, it’s important that they have the working capital available to take advantage of opportunities now and in the future when Britain’s relationship with the EU becomes clearer.”

Regional picture

Businesses in London and the West Midlands showed the most confidence during August, both at 37 per cent, ahead of the North West (35 per cent).

Those in the South East were the least confident, with an overall confidence of just eight per cent, 15 points below the national average.

Sectors

From a sector perspective, firms in the manufacturing sector remained most confident at 38 per cent, but confidence of construction businesses fell sharply by ‑12 points to 36 per cent, closely followed by consumer services (‑6 points to 22 per cent) and other services (‑6 points to 18 per cent).

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