Economic Survey Reveals Mixed Quarter for Welsh International Trade
41% of businesses in Wales reported that their export sales remained constant in Q2. However, 31% stated that export orders and advanced bookings increased during the same period, compared to 25% in Q1, marking a positive shift in future custom.
Following President Trump's 'Liberation Day' announcement in early April and changing tariffs throughout the quarter as a result of UK-US trade talks, businesses in Wales revealed the impact the announcements have had on their firms.
15% of businesses in Wales said they had been affected by the 10% tariffs introduced by the US on imports, while almost a quarter (23%) said that their business or supply chain had been affected by wider global tariffs that had been implemented by the US.
While some businesses shared that the tariffs did not have an effect on their trade, others reported that trade with the US had slowed down, with fewer enquiries and a reduction in orders due to uncertainty. 23% of businesses in Wales indicated that they would reassess country origin of goods to avoid the impact of tariffs. David Pena, Director of International Trade
David Peña, Director of International Trade at Chambers Wales South East, South West and Mid, said:
'It has been an unpredictable period for international trade, with ever-changing tariff decisions and trade talks progressing. Tariffs can act as a trade barrier to fostering long-term growth, and it is clear that the US' decisions have impacted businesses in Wales whether directly or through supply chains.
'At Chambers Wales, we stand for trade, commerce and economic growth and this data will shape how we support businesses in Wales through market volatility and towards growth.'
Away from trade, the Quarterly Economic Survey for Q2 also revealed businesses' experiences of recruitment, plans for investment and key concerns of the last quarter.
44% of businesses in Wales attempted to recruit in the last three months, and two thirds of these businesses experienced difficulties because of a shortage of suitable applicants. Over two thirds of businesses (67%) expect their workforce to remain constant in the next quarter, with 24% increasing their investment plans for training in Q2, suggesting that firms may be turning to upskilling and staff development in lieu of recruiting.
As per previous Quarterly Economic Surveys, businesses still feel under pressure to raise their prices because of labour costs and taxation remains the external factor causing the most concern.
Gus Williams, interim CEO of Chambers Wales South East, South West and Mid, said:
'Despite a mixed picture in the world of international trade, it is heartening to see the positives in our survey results from increases in export orders to investment plans for training.
'Of course, pressures persist particularly around recruitment, labour costs and taxation. With the UK Government unveiling its Industrial Strategy and Trade Strategy, we are seeing the beginnings of a long-term coherent approach for business support which may alleviate some of the recurring concerns that businesses in Wales are sharing with us.'
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