Businesses in Wales remain optimistic despite trade challenges and a continued hesitancy to invest in both equipment and training, according to Chambers Wales South East, South West and Mid’s latest Quarterly Economic Survey.
In Q4 of 2023, half of Welsh businesses stated that they believe that turnover will improve over the next 12 months while 42% predicted that profitability would improve, a small rise of 2% since the previous quarter.
However, investment and trade challenges persist, affecting business plans for long-term growth.
Over the last quarter, only 23% of businesses in Wales increased their investment in plant and machinery or equipment and 16% increased their investment in training. Just over half of Welsh businesses (52%) did not change their investment plans for plant and machinery or equipment and 66% did not change their investment plans for training in Q4 of 2023.
While trade fared slightly better in Q4 than Q3 of 2023, businesses in Wales have seen decreases in sales and orders both domestically and internationally. UK sales and advance orders both fell by 35% in Q4, while export sales and advance orders to overseas markets each decreased by 44%. Almost three quarters of businesses in Wales identified new markets as an opportunity for their business to recover.
Paul Butterworth, CEO of Chambers Wales South East, South West and Mid, said:
“Our latest Quarterly Economic Survey results show a small rise in business confidence and optimism in Q4; the shoots of confidence and growth are starting to appear as we begin the new year.
“However, the results also demonstrate the low growth economic climate businesses in Wales are currently operating in, as firms continue to report minimal movement in investment plans, skills development and trade.
“Building on the growth measures announced in the Autumn Statement, businesses will be looking to the Spring Statement in March for further assistance and, with a general election likely to happen this year, it is vital that a stable economy and long-term growth support is prioritised by policymakers.”