More Welsh firms are planning to hire new staff after business confidence rose eight points during May, according to the latest Business Barometer from Lloyds Bank Commercial Banking.
The Business Barometer questions 1,200 businesses monthly and provides early signals about UK economic trends both regionally and nationwide.
Companies across Wales reported an overall confidence figure of 30%, compared with last month’s figure of 22%.
This was due to firms across the nation reporting a four-point increase in confidence in their business prospects, at 28%, an 11 point rise in economic optimism at 31%.
As a result, a net balance of 34% of businesses now expect to hire more staff in the next 12 months - up 20 points on last month.
Across the UK, overall confidence climbed three points to 35%, as firms’ confidence in their own business outlook rose even though their optimism about the economy slipped.
Andrew Kemp, regional director for Wales at Lloyds Bank Commercial Banking, said: “It’s positive to see that confidence across Wales is rising, following last months’ dip in optimism.
“This boost has prompted more businesses to plan to recruit more staff, which is particularly encouraging for the local economy.
“Although the rise in sentiment is heartening, companies need to remain realistic about their prospects. Regularly revisiting and adapting their business plans will make firms better equipped to capitalise on new opportunities or navigate potential challenges.”
Across Wales, a net balance of 5% of businesses said they felt that the UK’s exit from the European Union was having a positive impact on their expectations for business activity.
This compares with a net balance of 5% who thought it was having a negative effect a month ago.
Overall confidence was strongest in the communications sector, at 50%. Transport and business and finance were the next most confident, at 43%, although that level represented a fall in both sectors.
Retail confidence bounced back strongly as the weather improved in May, rising 23 points to 38%, although manufacturing fell seven points to 33%.
Hann-Ju Ho, senior economist at Lloyds Bank Commercial Banking, said: “Business confidence is rising across the UK and most firms appear to be brushing off the economic slowdown in the first quarter, with national levels hitting a four-month peak in May.
“As EU negotiations enter a critical stage, it’s interesting to see that more than a third of firms across the UK anticipate Brexit will have a positive impact on their business activity.”
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