The overall economic picture is still positive, according to the latest findings from the Chambers of Commerce in Wales, despite fewer Welsh businesses reporting an increase in international sales and orders for the second quarter in a row.
The Quarterly Economic Survey, released on 9th October 2015 by the South and Mid Wales Chambers of Commerce and the West Cheshire and North Wales Chamber of Commerce at an event attended by Secretary of State for Wales, the Rt Hon Stephen Crabb MP at Bluestone National Park Resort, has revealed that fewer businesses are reporting improving export sales (35.5%), a decrease of 5.8 percentage points from the second quarter of 2015. However, almost three quarters of businesses (72.9%) are still experiencing consistent or increasing sales overseas.
The survey, which monitors the performance of businesses across Wales and acts as a barometer for the Welsh economy, also showed that the number of businesses reporting improving export orders has fallen by almost seven percentage points from 37.3% to 30.6%.
The survey did, however, find that more businesses across Wales were reporting increased and consistent UK market sales and orders, increasing by 2.9 percentage points (to 82.8%) and 1.7 percentage points (to 82.8%) respectively. Despite UK sales increasing at a steady pace, fewer businesses are expecting their profits to increase next year (down 7.3 percentage points to 45.9%). Similarly, fewer businesses are planning on increasing their investment in equipment (down 8.9 percentage points to 32.4%) and training (down 14.9 percentage points to 28.5%) in the next quarter.
Commenting on the latest figures, Keith Palmer, CEO of the South and Mid Wales Chambers of Commerce, said: “The fact that there has been a slowdown in export sales and orders for the second quarter in a row suggests that Wales is being affected by a deceleration in economic growth internationally. However, more businesses are reporting an increase in international sales and orders than a decrease which is positive and should only become a cause for concern if this trend is reversed next quarter.
“These figures are not cause for too much concern, however, as Welsh businesses make and sell many products which are sold in an English supply chain, for example the automotive sector, which then go on to be counted as UK exports when British products are sold abroad.
“With domestic sales and orders continuing to increase, businesses should be optimistic for the future considering the majority of Welsh businesses sell to customers within the UK.
“We do need to keep an eye on plans for investment in training and equipment which have dipped this quarter as these are typically indicators related to confidence. While it is not necessarily significant at this stage, any drop in confidence must act as a cautionary reminder to us all that we must keep working to ensure economic growth does not falter.”