The South Wales Chamber of Commerce’s latest Quarterly Economic Survey (QES), released today, reveals that businesses across Wales are confident about future growth, and have increased their investment in training and equipment over the last quarter.
The Q2 survey for 2013, which is sponsored by Santander, shows that 91% of businesses increased or maintained their investment in equipment and machinery, while 94% increased or maintained current levels of investment in training. This is up on the Q1 figures of 83% and 88% respectively.
The survey also shows that more than three quarters (84%) of businesses are optimistic about their profit margins over the next 12 months, expecting to either increase or maintain their profitability, and that more than 40% of businesses have actively been recruiting in the last quarter.
The Quarterly Economic Survey monitors the performance of businesses in Newport, Swansea, Cardiff, mid Wales and the surrounding areas and acts as a barometer for the strength of the Welsh economy.
Graham Morgan, director of the South Wales Chamber of Commerce, said: “The inclination towards future investment is promising and it is fantastic to see that so many businesses have been recruiting over the last quarter, with more than two thirds of those recruiting to fill full-time positions.
“While the current economic climate is far from perfect with sales remaining largely static and a drop in levels of ready cash flow over the last quarter, it demonstrates that confidence is returning in the Welsh business community, and businesses are continuing to think and plan ahead for future growth.”
Although sales for those businesses trading within the UK were slightly down for the quarter, the figures for export were more promising, with 81% of businesses increasing or maintaining their export sales, up on 78% last quarter.
The number of businesses reporting pressures due to the cost of raw materials needed to operate also fell, down to 53% from 60% last quarter.
Graham Morgan said: “Our priority now should be to nurture this confidence and help to build an environment that will help businesses to improve their sales and reach out to new markets. The Welsh Government has its part to play here, and increased investment in infrastructure, including pushing ahead with key projects such as Superfast Cymru, will help to achieve this.
“A super-fast broadband network that covers the whole of Wales is essential if we really want to enable businesses to make the most of international opportunities. It will also be crucial to Welsh Government’s plans to grow the Welsh tourism industry by 10% by targeting the US, Irish and German markets.
“The announcement last week of a public consultation on the M4 relief road is a positive step forward. The South Wales Chamber has been lobbying for this since 2010 and it is fantastic to see that it finally seems to be gathering momentum.
“The South Wales Chamber of Commerce is available to provide professional support and advice to businesses in Wales. We have just completed a successful Business Advice Month that saw us run advice sessions across Wales together with specific workshops on accessing foreign market places.
“The events were very well received, and we intended to run more in the future, so I would urge businesses to get in touch to find out how we may be able to help.”
The results of the latest QES were announced today at a special State of the Nation address from Dr Adam Marshall, director of policy and external affairs at the British Chambers of Commerce. Dr Marshall provided commentary on the QES and what the results mean for Wales.
He said: “The latest Quarterly Economic Survey, which is the UK’s largest and most representative business survey, shows some real improvements in business performance and confidence.
“While the results for Wales are not quite as positive as those for many other parts of the UK, I was heartened to see that employment amongst Welsh respondents had increased over the last three months, and that forward business confidence was buoyant.
“It is a great pleasure for me to be able to be in South Wales on the day that we unveil the national survey results for the second quarter of 2013. Given that the Quarterly Economic survey is used by the Bank of England when it considers interest rate decisions, and by the Welsh Assembly Government, the UK Government and the European Commission when they set economic policies, I hope that all Chamber members in Wales can contribute a few minutes of their time when next asked for their views. That way, we can ensure that Cardiff Bay, Westminster and Brussels understand what’s really going on at the heart of the local business community.”