The South Wales Chamber of Commerce’s latest Quarterly Economic Survey (QES), released today (8 April 2014), reveals that, despite growth stalling slightly in some areas from the previous quarter, businesses in Wales are moving into Spring with increasing confidence and high levels of optimism for the remainder of the year.
The Quarterly Economic Survey acts as a barometer for the strength of the Welsh economy, and, for the first time, includes results from across the whole of Wales, with the inclusion of businesses from north Wales.
The Q1 survey for 2014 shows that more than half (61%) of small and medium-sized businesses from across Wales are expecting to increase their profitability during the next 12 months, with 28.7% expecting to maintain their current profit levels.
The survey also reveals that 95% of businesses are looking to either retain their existing workforce or recruit in the next three months, the highest figure in the last seven years and one that is consistent across Wales. Despite this, more than half of businesses (53%) revealed that they had experienced difficulties in recruiting during the last quarter.
For businesses trading in UK markets, sales figures have continued to improve, with 87% of businesses reporting that sales levels either increased or were maintained during Q1. Businesses in Cardiff (55.7%) and Newport (50.9%) saw the largest increases in sales, and were above the Welsh average (49.7%).
Welsh businesses that trade internationally have continued to perform solidly, with 85% reporting that sales and orders have either remained consistent or increased. However, Graham Morgan, director at the South Wales Chamber of Commerce, believes more can be done to ensure Wales does not lag behind the rest of the UK in terms of exports.
He said: “While export sales and orders in Wales remain at a similar level to Q4 of 2013, it appears that Wales is not benefitting from the same progress in international markets as other Chambers are reporting throughout the UK. There are many Welsh businesses with excellent products and services and is vital that they are aware of the support available to help them increase their international footprint.
“We have regularly called for the professional sector, namely bankers and accountants, who should have in depth knowledge of their clients’ capacity for growth, to help Welsh businesses access new markets. If the professional sector can help highlight the support available to businesses looking to begin or grow exporting services, in both a financial and advisory capacity, then Wales can start to become a big player on the world stage.
“Despite many looking to recruit over the coming months, businesses are reporting growing pressures in recruiting for certain roles. Engineering and ICT skills are, as always, in short supply, but we are also having reports of gaps in middle management and marketing as well. With access to superfast broadband and better digital connectivity, we anticipate that ICT and social media skills will be of even greater importance over the next year.
“Ninety-eight percent of businesses surveyed increased or maintained their levels of investment in staff training and equipment, which is another indicator of their confidence.
“With the highest ever response to our survey, including input now from businesses in north Wales, we feel confident in the growth opportunities that lie ahead for Welsh businesses. However, as always, there is more work to be done and, if the economic recovery is to truly take hold, then there is no room for complacency.”