Business confidence in Wales has soared to the highest level in the 海角视频, shows new research. According to the latest business confidence monitor from membership body for chartered accountants, the ICAEW, the level in Wales was 26.1 in Q3 of this year – the highest rate of any 海角视频 nation or region. For the 海角视频 as a whole the level fell on the previous quarter to just 14.4.
The monitor considers anything between zero and 50 as confident, rising to plus 100 as much more confidence. Much less confidence is below a rating of minus 100.
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On Q2 in Wales the confidence level was up 5 points. The ICAEW put the improvement down to expectations of strong domestic sales and hopes that a Labour Government in Westminster will boost public investment in Wales.
Welsh businesses also forecast a significant uplift in domestic sales growth to 6.3% over the next year, the joint-highest in the 海角视频. Strong sales expectations in the energy and water, construction and IT and communications sectors is likely feeding into the strong confidence reading. Nevertheless, annual domestic sales growth declined significantly in what the report said was an “unspectacular year”, falling below the historical average for Wales.
The fall in confidence, although still in positive terrain, for the 海角视频 as a whole was the first in a year. The ICAEW said the decline was likely driven by mounting concerns over the tax burden and weaker exports growth, while investment remained low, ICAEW said.
The ICAEW said to boost confidence the Westminster government should use the upcoming Budget as an opportunity to conduct an urgent review of the 海角视频’s tax system and introduce reforms to stimulate economic growth, build confidence and drive investment.
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Robert Lloyd Griffiths, ICAEW director for Wales, said:“I’m very pleased to see that business confidence is higher in Wales than anywhere else in the 海角视频, and with such a strong spike in sentiment our companies are clearly sensing that a more collaborative working relationship between the Welsh Government and their colleagues in Westminster will result in brighter days ahead.
“The promise of investment for Wales is likely to have delivered this boost in confidence, as it would have a huge impact on our country. However, as we head towards the Chancellor’s first Budget later this month, it’s vital that both governments work together to deliver policies to grow the economy and provide stability.”
The monitor also shows that Welsh exports growth declined in the quarter, lagging the 海角视频 average. Even though an uptick for the next 12 months is expected, the rise would still below the historical average. Welsh economic output is somewhat dependent on the manufacturing and energy and water sectors, both of which have seen what the ICAEW described as “lacklustre” exports growth in the quarter. However, the number of companies citing regulatory requirements as a growing challenge fell sharply to 27%, with the election of a Labour government likely to have eased concerns. Customer demand is now the most prominent issue, cited by 48% of businesses, which the monitor said was a reflection of below-average domestic sales growth.
Cost pressures have also declined, and Welsh businesses reported that input price inflation softened for the second quarter in a row, with a further decrease expected in the coming year. Selling price inflation continued to ease in the year to Q3, although price growth was still double the historical average. Consequently, profits growth halved, although the rate is expected to increase next year.
Employment growth in Wales outpaced the 海角视频 average, with a further above average increase forecast, while salary growth is also expected to outpace almost all other parts of the 海角视频. Meanwhile, capital investment slowed quarter-on-quarter, though growth was broadly in line with the 海角视频 average.