Confidence among businesses in Wales has grown in the last month, a new report has found.
According to the latest Business Barometer from Lloyds Bank Commercial Banking, business confidence rose seven points during July to 30%.
Welsh firms reported higher confidence in their own business prospects month-on-month which was up 13 points at 41%.
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Optimism in the economy also rose two points to 19%, giving a headline confidence of 30%.
Welsh firms identified three target areas for growth over the next six months including diversifying into new markets (40%), investing in their teams (40%) and evolving their offering with new products or services (31%).
A net balance of 15% of Welsh businesses expect to increase staff levels over the next year, up three points on last month.
Dave Atkinson, regional director for Wales at Lloyds Bank Commercial Banking, said: “It’s great to see Welsh business confidence rise this month. With the summer holidays underway and the country basking in hot weather, increased footfall and demand in the coming weeks should help to shore up confidence among businesses in our tourism and hospitality sectors in particular."
He added: “In the face of rising costs, Welsh companies should focus on effective working capital management to enable them to make the most of the opportunities ahead. This will allow them to remain agile and to drive profitability during a crucial trading period.”
The Business Barometer, which questions 1,200 businesses each month, surveyed 100 businesses in Wales between 1-15 July.
The results provide early signals about UK economic trends both regionally and nationwide.
Across the UK, overall business confidence fell three points during July to 25%.
Firms' outlook on their future trading prospects was up three points to 37%, but optimism in the wider economy dropped nine points to 12%. The net balance of businesses planning to create new jobs also decreased, down seven points to 21%.
Business confidence declined across all four of the sectors in July, reflecting lower optimism about the economy.
Confidence within manufacturing declined the most this month (down 12 points to 20%), with firms citing moderating trading prospects and a notable drop in economic optimism, but also issues with inflation and supply bottlenecks.
There were also small falls in confidence for construction (down two points to 28%), retail (down six points to 25%) and services (down one point to 24%).
However, every UK region and nation reported a positive confidence reading in July, with four out of 11 recording a higher reading than last month.
Aside from Wales, the East of England (up 15 points to 46%) and West Midlands (up eight points to 38%) saw the biggest increases month-on-month, with the East of England now the most optimistic region overall.
Lloyds Bank senior economist Hann-Ju Ho said: “Business confidence declined this month, suggesting that economic headwinds are becoming more forceful. Despite this, firms’ assessment of their own trading prospects showed some resilience in the face of a challenging environment.
"Meanwhile, price pressures have shown no clear signs of a downward trend and there appears little sign yet that wage pressures are abating.”
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