Optimism falls in seven of 11 UK regions – including Wales

Business confidence in Wales fell 19 points during January to -20 per cent according to the latest Business Barometer from Lloyds Bank Commercial Banking.

Companies in Wales reported lower confidence in their own business prospects month-on-month, down ten points to -11 per cent.

When taken alongside their views of the economy, down 26 points month-on-month to -28 per cent, this gives a headline confidence reading of -19 per cent.

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

More than half (56 per cent) of firms said current Covid-19 restrictions had caused a fall in turnover, but they expected the effects of the vaccine programme to boost trading prospects for 2021, with 43 per cent saying the rollout had made them feel more confident about the year ahead. However, only 14 per cent expect trading levels to return to pre-pandemic levels in the next twelve months.

When it comes to jobs, a net balance of seven per cent of businesses in the region expect to reduce staff levels over the next year, up eight points on last month.

At UK level, overall business confidence dipped in January as the pre-Christmas lockdown came into force, falling by three points to -7 per cent. Firms’ economic optimism dropped dramatically month-on-month, decreasing by 34 points to -10 per cent.

Almost all UK nations and regions saw a month-on-month dip in confidence during January.

Amanda Dorel, regional director for Wales at Lloyds Bank Commercial Banking, said: “Ongoing lockdown measures in Wales have had a detrimental effect on business confidence as many firms, particularly those in the hospitality and tourism industries, have had to close their doors once again.

“While the vaccine rollout appears to have brought some hope for improved trading prospects during the course of the year, the outlook remains uncertain and firms are facing a number of significant challenges in the immediate term. We will remain by the side of businesses across Wales to help them navigate this turbulent period.”

South Wales Argus | Business