Confidence in small business in Wales falters but small businesses continue to drive Wales’ economy forwards.
A new report from FSB Wales shows that small business confidence has dropped from a three year high of +31 in Q2 to +22 in Q3, however, the Welsh Business Index shows that Wales is still significantly outperforming the rest of the UK, which saw the index fall from +15 last quarter to +1.1 in Q3.
The index shows that small business confidence is still higher than it was a year ago. The UK Small Business Index stands above the -2.9 level seen in Q3 2016, but has fallen over the past two quarters.
Janet Jones, FSB Wales Policy Unit Chair, said:
“This new SBI report shows that small business confidence has wavered in Wales, although confidence in Wales is still higher than that in the rest of the UK.
“Despite faltering business confidence, 19.7% of business reported that they had increased their employee headcount in the third quarter of 2017. This serves as an important reminder that Wales is built on a small business economy, and that any plans from the Welsh Government to develop the national economy must be aimed at improving circumstances for small businesses.”
Over the third quarter a net balance of 52% of small businesses in Wales reported export growth – much higher than the 19.5% reported by small businesses across the UK. Growth is largely driven by strength in key export markets such as the EU. The EU accounts for over two thirds of Welsh exports, compared to just less than half of the UK’s exports. In the year to March 2017, the value of exports to the EU from Wales increased by 13%, whilst exports to countries outside the EU increased by 10%.
Janet Jones commented: “Small businesses in Wales are exporting more than ever before, and it is important that the UK and Welsh Governments are supporting this growing trend. We recently called for Welsh Government to develop a Trade and Investment Strategy and a key part of that would be supporting small businesses who seek to trade abroad.”