23-07-2025
- Business
- South Wales Argus
Welsh business confidence up but still in negative zone
The increase was identified in a survey of business leaders, although this still remains in the negative zone.
ICAEW's Business Confidence Monitor (BCM) for Wales, published on July 24, put confidence at -3.7 on the index for Q2 2025, an improvement from -17.6 in the previous quarter.
However, this reading was still below the historic average for the country.
ICAEW pointed out that confidence remains fragile due to weak domestic and export sales growth.
Manufacturing, engineering, retail, and wholesale in Wales reported some of the UK's lowest confidence levels.
The institute added that uncertainty around the outcome of next year's Senedd elections could be a contributing factor, although the UK-US trade deal has likely provided a boost, particularly for exporters.
Both domestic sales and exports grew at a lower rate in Q2 than their respective historic averages, according to the BCM.
Welsh businesses forecast improvement in both domestic sales and exports growth within the year ahead.
The tax burden remained the most prominent challenge for Welsh businesses following April's rise in employer's National Insurance Contributions, with more than half of the nation's companies citing it as a growing source of difficulty.
Customer demand and marketplace competition were also cited as challenges.
Minimal employment growth in the year to Q2 2025 reflects the increases in National Insurance and the National Living Wage in April, as well as the performance of key sectors.
Robert Lloyd Griffiths OBE, ICAEW director for Wales, said: "It's heartening to see that sentiment has increased and is now broadly on par with the UK average.
"Nevertheless, our companies are underperforming across most of the key metrics, suggesting we are not out of the woods yet."
Nationally, business confidence declined quarter on quarter to -4.2 in Q2 2025.
