Paul Butterworth, CEO at Chambers Wales South East, South West and Mid, said:

“Today’s figures showing only 0.2% growth for Q2 2022 indicate how the economy is still struggling with a stagnant market and stubbornly high inflation. Inflation has come down slightly, but SMEs are still feeling the increased cost pressures from three years of consistent economic shocks and little relief.

“The British Chamber of Commerce’s Quarterly Economic Forecast expects GDP to continue in this manner for 2024 and 2025. Firms cannot continue to tread water for that long. Economic difficulties are being felt acutely across Wales, with one in six high street shops closing and 71% of Welsh businesses struggling to recruit according to our own Quarterly Economic Survey for Q2.

“With the uncertainty of elections in 2024, businesses are unable to plan far into the future. Welsh SMEs need a clear framework from policymakers in the Senedd and Westminster of how the skills gap will be tackled, how economic growth will be obtained and how to prepare for the increasing influence of net zero in the short and long-term.”

David Bharier, Head of Research at the British Chambers of Commerce, said:

“Today’s figures showing GDP grew by 0.2% in the three months to July, with a 0.5% decline in July itself underlines the precarious state of the economy. Small and medium-sized businesses continue to battle against stubbornly high inflation, rising interest rates, trade barriers with the EU, higher taxes, and an uncertain labour market.

“Our latest Quarterly Economic Forecast, published last week, expects GDP to flatline over the next two quarters, leading to 0.4% growth for this year. Longer term growth is also expected to be less than 1% for 2024 and 2025.

“Businesses need to see a clear framework from politicians, outlining how long-term investment can be unlocked, and economic growth accelerated.”