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Business confidence falling in Wales

FSB’s latest Small Business Index Report for Quarter 4 of 2017 shows that small business confidence fell sharply at the end of 2017. 

Business confidence in Wales declined from 22.1 points to 2.1. However, whilst the decline was in line with the UK average, Welsh business confidence still remains above the UK figure of -2.5.

Although both Wales and UK overall have seen an increase in business confidence at the beginning of 2017, this has now fallen to its lowest level in two years.

Welsh businesses are also more reserved about business growth in this latest survey. Only slightly more small businesses in Wales reported that they increased employment compared to those who said that they had to let people go. However, two-thirds of firms said that their headcount remained the same.

For Q1 of 2018, firms are much more cautious about their prospective employment levels in coming months; 2% of Welsh businesses expect to hire more staff, which is in line with the UK-wide average of 2.9%.

Janet Jones, FSB Wales Policy Chair, said: “Despite a sharp fall in confidence, Welsh businesses remain more optimistic than those elsewhere in the UK and this is to be welcomed. However, as Brexit negotiations continue, it is clear that UK and Welsh Governments must work together to ensure that businesses in Wales are provided with the certainty that they need to plan for the long-term of their business.

“Business confidence in Wales is generally resilient and we hope to see it bounce back very quickly, but this will require cooperation between governments, and for the Welsh Government’s Economic Action Plan to deliver real advantages for businesses across the country. Engagement by Welsh Government with business on this needs to be meaningful and proactive to help bolster confidence that there is a plan going forward.

"Similarly, the UK Government needs to make its vision for smaller businesses in Wales real and relevant.

“Governments in Wales and London also need to listen to the specific issues highlighted within this report. For instance, finding appropriately skilled staff was raised by businesses as the most important barrier to growth. Considering these constraints as the UK Government considers its approach to issues around ensuring skills supply during Brexit negotiations is therefore important.”