Survey Boost for Welsh Businesses
In a remarkably progressive step, the Welsh Government has increased the number of companies participating in its national business survey by 1,000 for the years 2022 and 2023. Even though this numerical increase might not seem like much at first, the repercussions are remarkably similar to what happens when a wider net is cast in deep water—all of a sudden, a more varied catch of economic insights appears. Policymakers, who have long needed a sharper lens to understand Wales’ changing business landscape, will especially benefit from this survey boost.
The government has produced a very clear picture of the health of local businesses by expanding the scope to encompass a wider range of industries, from digital services to rural manufacturing. This action aids in deciphering the complex narratives that lie behind the numbers as well. Finding unexplored growth areas, predicting sector-specific difficulties, and identifying regional disparities are all made much simpler by strategic expansion. This data overhaul is nothing short of revolutionary in the post-pandemic recovery context, where precision and agility are essential.
This expansion is especially novel because it reframes data as a dynamic tool instead of a static archive. The disconnect between macroeconomic theories and the realities on the ground has widened too much in recent years. However, the survey bridges that gap by amplifying the business voice on a large scale. Taxation, investment incentives, and training program decisions can now be made with much greater precision. This means policy could finally speak to medium-sized businesses that are struggling with hiring or growing operating expenses.
For example, 24% of Welsh businesses expected to downsize, up from 15% in the previous quarter, while 59% of businesses reported a stable workforce size over the past year. In the absence of the supplementary survey sample, these changes could have gone unnoticed. However, with improved data, support measures can now be more strategically targeted. This is a real-time economic adjustment tool, not merely a bureaucratic exercise.
The government can act more confidently by utilizing survey insights. It can implement region-specific startup incubators, modify procurement policies to encourage local supplier chains, or fine-tune apprenticeship grants in industries exhibiting hiring hesitancy. New data may have an impact on the implementation of advisory support networks or microfinance programs for startups, where obtaining capital is still the largest obstacle.
Several respondents stated in the final quarter of 2024 that raising the minimum wage would not have a direct impact on their business operations. Others, on the other hand, hinted at a cautious change, indicating plans to raise prices or slow hiring. It is crucial to comprehend this strategy divergence in its context. These nuances could be reduced to averages in the absence of a representative sample, losing the complexity that characterizes actual economies.
The survey‘s transition to a safe online platform further demonstrates its aspirations for the future. The Welsh Government is making it possible for extremely effective data collection and real-time policy responsiveness by progressively digitizing responses. Businesses feel that this change is inevitable, even long overdue, especially those that are already functioning in digitally transformed environments.
The government also has access to companies that might not otherwise be visible—those with active Welsh operations but headquarters located elsewhere—thanks to increased consultation. The dataset’s authenticity and depth are significantly increased by including their voices as well. This is essential in an environment where economic contribution, operational footprint, and regional identity don’t always line up perfectly.
The results of this survey improvement will probably have an impact on workforce strategies, educational reform, and funding applications in the years to come. Participatory intelligence collection is helping to understand the Welsh economy rather than just observe it. Wales forges a more direct and astute route to inclusive growth as more companies are polled, heard, and involved.
| Attribute | Details |
|---|---|
| Survey Years Boosted | 2022 and 2023 |
| Sample Size Increase | Additional 1,000 businesses in Wales |
| Purpose | Deeper understanding of economic performance and challenges |
| Sectoral Range | Services, retail, manufacturing, technology, rural enterprises |
| Data Impact | Influences policy, investment strategies, workforce planning |
| Research Partner | Miller Research (services sector study) |
| Platform Transition | Gradually moving from paper to secure digital surveys |
| Legal Authority | Conducted under Statistics of Trade Act 1947 |
Latest
Latest Employment Data Wales
With new employment data providing a snapshot that is both illuminating and, at times, surprisingly complex, Wales finds itself at a critical crossroads. The data, which were obtained from HMRC and the Office for National Statistics, show more gradual recalibrations than sudden changes. The headline may appear stable given that the employment rate for those between the ages of 16 and 64 is 69.9%. However, a closer examination reveals patterns that demand careful consideration and prompt action, much like the gentle rustle before a storm.
Analysts have created a very clear picture of current trends by using payroll data and long-term labor force surveys. Over the past year, the unemployment rate has increased by 1.2 percentage points to 5.4%. Even though that shift might seem small, it represents a larger undercurrent in which cautious hiring, changing workforce dynamics, and economic inactivity are all becoming more intertwined. When taken as a whole, these patterns point to a labor market that is adjusting to the post-pandemic economy slowly and unevenly.
Sectors like logistics and digital services have held up well in recent months, adding modestly to the number of jobs created. However, hiring has slowed, sometimes noticeably, for positions requiring mid-level technical skills, especially in manufacturing, construction, and retail. Employers are becoming noticeably more cautious, particularly as consumer confidence plateaus and wage costs increase. Wales is barely keeping its footing in the context of larger UK trends.
Payroll data from the same reporting period showed a slight monthly increase of 700 workers, increasing the total to 1.32 million. It’s a very small but symbolic movement, like a child’s first tentative steps when learning to walk. Even though they are modest, these numbers show that the recovery process is still moving forward, albeit more slowly than many had anticipated. The need for specialized regional policies is further supported by the fact that, despite the somewhat improved employment stability seen nationally, Wales’s disparity with the UK as a whole keeps growing.
The Welsh Government has the chance to take decisive action through strategic planning and public-private cooperation. It can create training programs that are not only incredibly effective at closing the existing skills gap, but also incredibly efficient by utilizing advanced analytics and speaking with local employers. The government’s expansion of micro-credential programs—brief, stackable credentials that enable workers to switch between industries—is one especially creative example. This model is proving to be very flexible for medium-sized businesses, giving them instant access to a talent pool that can be tailored to their needs.
The rhythm underneath the numbers is what most catches the eye in the data, not just the numbers themselves. At 26%, the economic inactivity rate is still high, indicating that thousands of people are still excluded due to systemic obstacles like poor health, outmoded skill sets, or a lack of easily accessible childcare. This is a prominent headline in the field of employment policy, not a footnote. In a single strategic move, the government could greatly decrease labor shortages and increase economic participation by re-engaging these groups.
Wales could take the lead in rethinking work through deliberate policymaking, particularly in a culture that frequently takes job stability for granted. Skills-based planning is more important than ever as automation and artificial intelligence (AI) are predicted to change workspaces in the upcoming years. By combining information from various sources, such as the Labour Force Survey and HMRC’s real-time payroll system, the Welsh Government is laying the groundwork for long-term decision-making that is not only strong but remarkably resilient.
The situation is still unclear for early-stage workers, especially recent graduates and school dropouts. While some industries, like green energy and creative tech, are actively hiring, others have completely stopped hiring. Rising entry-level wage requirements and the difficulty of onboarding young, inexperienced talent are issues that employers are concerned about. The government could overcome this reluctance and open up new job opportunities for young people by providing targeted wage subsidies and employer assistance.
Wales’ employment trends over the last ten years have resembled a tide in rhythm: rising with investment and falling with policy gaps. However, the tide is now turning in unpredictable ways as we navigate a precarious post-pandemic recovery. Wales runs the risk of stagnating rather than accelerating if it doesn’t make fresh attempts at sector-specific stimulus, upskilling, and workforce engagement.
| Attribute | Latest Data – Wales |
|---|---|
| Employment Rate (16-64) | 69.9% |
| Change (Yearly) | -0.1 percentage points |
| Unemployment Rate (16+) | 5.4% |
| Change (Yearly) | +1.2 percentage points |
| Economic Inactivity Rate | 26.0% |
| Change (Yearly) | -1.0 percentage points |
| Payrolled Employees | 1.32 million |
| Change (Monthly) | +700 (+0.1%) |
Business Confidence in Wales
Wales’s business confidence is currently going through a turbulent but guided phase. The ICAEW’s Business Confidence Monitor fell precipitously to -17.6 in Q1 2025, making Wales the UK’s lowest point. Although it is a figure that draws attention right away, there is a more complex and nuanced story behind it. Many Welsh businesses are changing their plans, embracing innovation, and redefining their goals in order to face challenges bravely rather than cautiously, in a variety of industries, including tech and construction.
The regional mood is still uneven even though Lloyds Bank’s February Business Barometer showed a relatively optimistic 24% confidence rating, up three points from the previous month. For medium-sized businesses, overcoming layers of cost pressure and uncertain hiring is frequently more difficult than lacking vision. Numerous Welsh businesses are discovering incredibly effective methods to sustain momentum by utilizing real-time analytics and optimizing internal procedures. This is a reshaping of intent rather than a uniform recovery, driven by businesses that are quietly adjusting, recalibrating, and moving forward.
Digital transformation was accelerated across industries during the pandemic, and its pace hasn’t slowed. Sixty-four percent of Welsh businesses actively use data to inform their decisions, and 65% report initiating or finishing digital initiatives. These changes have been especially helpful in increasing agility, improving customer experience, and developing leaner, more responsive operations. Such shifts have proven to be remarkably successful in reducing volatility in the face of economic uncertainty.
With the backing of the government’s pledges to build homes, confidence in the construction industry has increased. The industry’s anticipated 3.0% workforce growth is almost three times higher than its historical average, demonstrating the direct positive impact of sustained investment. Meanwhile, a sharp increase in demand for AI-enabled services is driving robust growth in both domestic and export sales for tech and communications companies. Welsh businesses are showing in these areas how creativity and resiliency frequently go hand in hand.
Recruitment is still a difficult task in Wales. The attraction and retention of employees is a recurring concern for almost half of all businesses. However, the terrain is gradually changing. Three quarters of businesses have staff development programs in place, and nine out of ten now consider upskilling to be a strategic priority. These initiatives are long-term investments in people, performance, and productivity rather than just HR checkboxes. Welsh companies are strengthening themselves internally by investing in their workforces, despite external pressures.
The situation is mixed for entrepreneurs in their early stages. Ambition can be stifled before it takes root by increasing wage obligations and administrative challenges, particularly in relation to ESG and tax compliance. However, a lot of startups are discovering different routes to success, frequently by concentrating on specialized services or aiming for new markets like digital health and sustainability technology. These initiatives are quietly influencing the next wave of Welsh business by generating value at the periphery through strategic alliances and focused mentoring.
Wales’s equity investment has recently shown encouraging signs of recovery, increasing by 8.74% in 2023—particularly noteworthy considering the country’s 27.2% decline. This increase shows that investors are becoming more confident in Wales’ capacity for innovation. Even though the overall environment is still unstable, this wave is being driven by particularly innovative businesses—those that are utilizing AI, sustainable energy, or data science. They are demonstrating both aspirational and practical resilience.
Additionally, the ESG journey is progressing. A startling 78% of businesses intend to invest in sustainability measures within the next two years, despite 27% of them acknowledging they have never heard of ESG. Businesses are realizing that sustainability is now an operational necessity rather than a nice-to-have, as evidenced by initiatives like waste reduction and climate technology. The direction is encouragingly clear, even though funding gaps continue to be a challenge, particularly for smaller businesses. Over two-thirds of companies surveyed claim to comprehend how important ESG is for fostering stakeholder trust and ensuring long-term competitiveness.
Expectations for profits are also starting to rise again. Forecasts for the upcoming year are cautiously optimistic, despite the fact that many companies reported muted growth in Q1 2025. Companies now expect growth of 4.7%, with the construction, finance, and technology sectors seeing the biggest gains. However, wage inflation and declining consumer demand continue to put pressure on industries like retail and transportation. Forward-thinking industries, on the other hand, are still making investments, albeit strategically rather than aggressively.
Business leaders in Wales are gradually changing the course of events by implementing strategic adaptation and consistent investment. It’s a methodical return, characterized by strategic choices, staff empowerment, and realistic optimism, rather than a spectacular one. Wales is showing that recovery is more than just a figure; it’s a way of thinking in the field of regional economics, where confidence is frequently brittle.
| Indicator | Wales 2025 (Q1/FY) |
|---|---|
| ICAEW Confidence Score | -17.6 |
| Lloyds Business Barometer | +24% (Feb 2025) |
| Top Concern | Rising Costs (57%) |
| Second Concern | Recruitment & Retention (49%) |
| Most Confident Sectors | Construction (+7.8), IT & Comms (+10.0) |
| Least Confident Sectors | Manufacturing & Engineering (-11.1) |
| Digital Transformation Active | 65% of businesses |
| AI Adoption Rate | 18% of businesses |
CBI Business Optimism Index
The manufacturing sector in Britain has seen a sharp decline in confidence in recent months. The most recent Business Optimism Index from the Confederation of British Industry has fallen to -47, an exceptionally low number that indicates more than just pessimism; it also reflects growing uneasiness among manufacturers who are struggling with growing costs, declining global demand, and tightening credit. This decline is not only sharp, but historically significant as well, representing the most negative sentiment since the 2020 turbulence, compared to -24 in the previous quarter.
The CBI’s quarterly index, which gathers sentiment from more than 400 manufacturing companies, is an essential gauge of industrial confidence. Companies are questioned regarding capital investment, hiring, export orders, and output expectations. A composite score that ranges from -100 (extremely pessimistic) to +100 (extremely optimistic) is the end result. It is currently leaning significantly in favor of the former. The index captures a wider mood shift that is sweeping across industries like a slow-moving weather front rather than just reflecting isolated complaints.
Many businesses are bracing rather than building in the face of global volatility, especially in light of shifting US tariffs and domestic tax hikes. The difficulty for mid-sized manufacturers is frequently in defending long-term investment in the face of immediate uncertainty. Businesses have significantly cut back on their expenditures on property, research, and equipment—not because they want to, but rather because margins have been severely squeezed and financing has grown more challenging.
Some businesses are trying to stay resilient by implementing digital strategies and using cost-cutting tools. Some businesses are simplifying logistics and automating processes to free up human resources for more strategic work. These strategies have been especially successful in stabilizing operations; however, when public confidence declines, they can only take businesses so far.
It should come as no surprise that employment intentions have declined. Companies now anticipate laying off employees at the quickest rate since the pandemic’s early months. Even so, progressive businesses are looking for opportunities despite the challenges. Some are making decisions that are particularly advantageous for managing long-term change, such as retraining their employees, implementing modular job roles, and stepping up internal upskilling.
Businesses are also entering less crowded markets through strategic alliances, subtly enhancing their export resilience. Nevertheless, global competitiveness is in jeopardy due to the sharp decline in export orders, especially in non-EU markets. Recently, a managing director of a manufacturer in Wales said, “It’s not just about costs anymore.” It all comes down to confidence, both our own and our clients’. Despite being anecdotal, her opinion captures the general atmosphere from finance teams to factory floors.
Digital transformation, meanwhile, continues to be a unique area of promise. Businesses that have adopted cloud-based systems and data-driven decision-making have reported noticeably increased agility in the last 12 months. AI-powered forecasting tools, for instance, have assisted businesses in anticipating price changes and shortages of raw materials, resulting in quicker and more effective inventory responses.
The declining index has not gone unnoticed in the world of policymaking. Speaking for British business, the CBI has urged the government to provide both short-term respite and long-term clarity. The recommendations that are gaining traction include targeted export funding, simplified planning regulations, and tax incentives for research and development. These are tools that can significantly improve sentiment, but they are not panaceas.
The Business Optimism Index serves as an industry mood diary in many respects. The entries currently read nervous, even fatalistic. But the industrial heartland of Britain has seen plenty of upheaval. It has withstood supply chain chaos, a pandemic, and Brexit in the last ten years. Even though this most recent decline was severe, it might only be a turning point rather than a complete collapse.
The outlook for early-stage startups is still cautiously optimistic, particularly for those investing in technology, green energy, or advanced manufacturing. Although it is not withdrawn, venture interest is diminished. Investors are keeping a close eye on businesses that are nimble enough to scale lean and have a very clear value proposition.
The CBI index might start to rebound in the upcoming quarters, especially if inflation slows and interest rate reductions provide some breathing room. Despite their injuries, company executives are still receptive to new ideas. Many are simply awaiting the first unambiguous indication that the fog is clearing.
The CBI index was introduced in the 1950s, and since then, its changes have frequently come before more significant changes in the economy. It acts as a kind of early warning system, sometimes dramatic, always directional, by monitoring sentiment before it manifests itself in GDP or employment figures. The system is blinking red at the moment. However, if political and corporate leadership step up to the plate, sentiment can settle, much like a compass that swings wildly during a storm before stabilizing.
| Attribute | Details |
|---|---|
| Quarter | Q1 2025 |
| Index Value | -47 |
| Previous Quarter Value | -24 |
| Historical High | +55 (Recorded in 1973) |
| Historical Low | -87 (During 2008 Financial Crisis) |
| Consensus Forecast | -30 |
| Change vs Previous Quarter | -23 points |
| Key Sectors Surveyed | Manufacturing, Export Trade, Engineering, Automotive, Consumer Goods |
| Survey Coverage | 400+ manufacturing firms of all sizes across the UK |
| Export Orders Status | Fastest decline since 2020; significantly impacting EU and non-EU trade |
| Domestic Demand Outlook | Weak but stable; expected to rebound slightly in Q2 (forecast: +5.1%) |
| Hiring Intentions | Sharp decline expected; worst hiring sentiment since July 2020 |
| Capital Investment Outlook | Cutbacks reported; weakest growth projection since 2021 |
| R&D Investment Trend | Slowing growth; many firms halting or delaying innovation projects |
| Top Business Concerns | Rising input costs, tax uncertainty, shrinking order books, weak demand, geopolitical trade tension |
| Input Cost Inflation | Expected to rise further in Q2 2025 |
| Profit Margins | Contracting across most sectors; consumer goods sector hit hardest |
| Employment Forecast | Negative; net decrease in headcount projected across most manufacturing firms |
| Sector with Strongest Confidence | IT & Communications (Index: +10.0) |
| Sector with Weakest Confidence | Manufacturing & Engineering (Index: -11.1) |
| Policy Impact Sensitivity | High; firms seeking clarity post-Autumn Budget, especially around tax and export support |
| Reported by | Confederation of British Industry (CBI) |
| Link to Official Report | CBI Economic Surveys – Business Optimism Index |
