The findings of the very first Welsh Business Barometer released by the South and Mid Wales Chambers of Commerce in partnership with the West Cheshire and North Wales Chambers, suggests that confidence in the Welsh economy is growing, with 42% of businesses expecting an increase in turnover over the next 12 months.
The Welsh Business Barometer is the new face of the Chamber’s well-respected Quarterly Economic Survey, published quarterly since 2014 as an independent survey of businesses in Wales, covering areas like UK and export market performance, finances, employment and business confidence. All-Wales data is drawn from the 7,500+ respondents who complete the survey UK-wide and compared against previous quarterly figures, as well as corresponding quarterly figures from the previous year. The inaugural survey also included a consultation with Chamber members in Wales to find out their priorities for business growth leading up to the Welsh Assembly elections on 05 May.
Employment growth continued to feature heavily, with 42.8% of Welsh businesses recruiting new staff during the first quarter of 2016 and 10% more businesses reporting that their workforce had increased in size, rather than decreased over the quarter – up 4.6% on the previous quarter. Looking forward, 15.2% intended to increase the workforce still further over the coming months (up 3.2% on Q4, 2015) however, the wider concern around the skills gap remains high, with 66.4% of business reporting difficulties in recruiting during Q1, leading to the Chamber urging all parties in the upcoming elections to make a commitment to a national workplace basic skills training programme, as well as placing a greater emphasis on enterprise modules for all higher education students, in a bid to combat the skills shortage in Wales.
The survey also showed a deceleration in businesses experiencing an increase in export sales, down 2.9 percentage points to 16.1%. However, 15.2% more businesses reported an increase in orders compared with those who saw a decrease, up 3.2 percentage points, which indicates that the export market could improve later in the year. Business priorities for export growth included creating a new international business organisation for Wales, bringing more flights to Cardiff Airport and doing more to develop Wales as a brand across the world.
Commenting on the figures, Keith Palmer, CEO of the South Wales Chamber of Commerce, said: “It’s extremely positive to see that business confidence has continued to rise across Wales after the turn of the New Year. Although the job market isn’t as buoyant as it was this time last year, more businesses are intending to increase their workforce, which suggests that people are now in more secure roles. Not only are more businesses seeing an increase in their workforce, but more are projecting this trend to continue, suggesting that this may be long-term growth throughout Wales.
“We had hoped that the export statistics in quarter four were the marker for a change, but it seems that sales saw another slump in the first quarter of the year. However, with more businesses reporting increasing export orders, we hope that this is just a brief lull before the market picks up again. We would like to see this issue brought to the forefront by all parties involved with next month’s Assembly elections through a re-invigoration of the government’s international strategy. This needs to be wholly led by business to provide what business needs in the most appropriate international markets.
“The skills gap has been a problem for Welsh businesses for quite some time, with two-thirds of businesses regularly encountering difficulties with recruiting. If the new government wants to address this successfully, we believe that there needs to be a greater investment in basic skills training, to ensure that potential applicants are ready for the world of work. As well as this, giving young people access to enterprise modules in higher education will give them the chance to build up their knowledge of business and enterprise, helping them prepare for work or to even set up their own firm.”