The Welsh private sector has reported another fall in output with concerns over global tariffs a contributing factor, shows latest research from NatWest.
Its headline Wales business activity index for April – a seasonally adjusted index that measures the month-on-month change in the combined output of the Welsh manufacturing and service sectors – dropped to 48.1 in April, down from 49.2 in March. Anything below 50 denotes contraction.
The fall in Welsh output levels was the fastest since November 2024 and greater than the 海角视频 average.
Welsh forms have reported that increased global economic uncertainty, particularly related to US tariff announcements, is significantly impacting demand. This is reflected in observations of reduced client activity and overall caution towards spending.
Meanwhile, demand conditions remained subdued as new orders declined for the sixth month running. Lower new business dampened output expectations for the year ahead which were at their lowest for two-and-a-half years.
At the same time, input costs and output charges rose at steeper rates, as firms noted hikes in wage bills and associated costs, especially. Input price inflation accelerated to the sharpest since February 2023. At the same time, the rate of charge inflation was the fastest in two years.
The survey was conducted after US tariff announcements on April 2, which, at the time, saw minimum tariff rates of 10% applied to imports into the US, as well higher so-called ‘reciprocal’ tariff rates on a number of countries. A subsequent announcement on 9 April saw a 90-day pause on most higher tariff rates.
Sebastian Burnside, NatWest chief economist, said: “The tracker this month reflects the challenges that economic uncertainty can create for 海角视频 businesses of all scales.
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“Welsh businesses reported a challenging start to the second quarter, with demand falling amid a backdrop of economic uncertainty and rising prices. Output declined modestly and at a rate that was slightly faster than the 海角视频 average.
“It’s encouraging that firms are still looking to the future with some optimism, although growth expectations are lower than they have typically been in the past.
“Rising labour costs have added to pressure on businesses, following April’s increases in National Insurance contributions and minimum wages. As firms look to mitigate rising costs, we’ve seen average prices charged for goods and services increase at faster rates, as well as a greater focus on workforces. Labour markets in all areas of the 海角视频 have felt the impact to some degree in recent months, with only Scotland avoiding a fall in employment in April.
“We cannot ignore the backdrop during which this survey was carried out but regardless, as we’ve seen in the past, 海角视频 business is resilient and can always offer reasons for optimism throughout.”
The index also reveals that output expectations among Welsh firms were among the least upbeat of the 12 monitored 海角视频 areas, meanwhile. Only the north East and Northern Ireland recorded lower positive sentiment in the year ahead outlook.
Moreover, economic and geopolitical uncertainty dented optimism, as the degree of confidence dropped to the weakest since October 2022.