Small business growth in Wales recovered in the first quarter of the new year after a worrying end to 2022, new research suggests. According to new data from Novuna Business Finance, which tracks the outlook of small firms every quarter, the growth forecast for small enterprises in Wales has significantly improved in the first three months of 2023, compared to the previous quarter.
A third (33%) of small businesses predicted significant or modest expansion in Q1 2023, compared to 22% of businesses in Q4 2022 - the lowest level in two years. While 19% of Welsh firms said they were struggling to survive, compared to 30% at the end of last year.
However, despite the positive start to the year, 37% of Welsh firms were concerned about general economic volatility, along with staffing (10%) and employee skills gaps and shortages (15%). Compared with the national average, Welsh enterprises were more likely to be concerned about compliance and regulations (32% vs the national average of 15%) and red tape (25% vs the national average of 16%).
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In terms of securing future trading and further expansion, measures cited by businesses in Wales included being stricter with timely payments from clients (25%), reducing fixed costs, (47%) and improving cash flow in the business (21%).
Jo Morris, head of insight at Novuna Business Finance, said: “Despite severe headwinds of an uncertain economic environment, spiralling inflation, and high energy costs are presenting a particularly challenging playing field for businesses, confidence among businesses in Wales remains resolute. While this stormy weather endures, it is important not to lose sight of the longer-term horizon.
“Whether growing, restructuring or consolidating, every business needs a plan and Novuna Business Finance will be there to support established enterprises that are working on strategies to adapt, grow and fulfil their potential despite the enormously challenging context.”
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