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  1. ITV Report

Welsh business confidence has fallen, survey suggests

Business confidence in Wales has taken a hit in the last three months according to the latest survey by the accountants' body ICAEW and Grant Thornton.

Fifty-five Welsh business leaders were asked about the prospects for their firms over the next year and they predicted jobs are expected to grow by under one per cent.

The gloomy outlook follows a slowdown in growth in turnover, exports and gross profits.

It is clear that confidence is fragile and businesses are holding back on investment because of their worries about the future.

– David Lermon, ICAEW director for Wales

Geraint Davies, partner at Grant Thornton, said: "The Welsh unemployment rate is 9 per cent compared with 8.1 per cent for the UK as a whole.

"The already tough labour market could get even worse in the winter months."

Wales has the second highest public sector employment dependency rate in the UK, with 26.2 per cent of workers employed by the state. Only Northern Ireland has a higher rate.

This leaves Wales particularly exposed to Government cutbacks, and with the private sector not filling the gap as quickly as hoped, employment prospects in Wales look poor.

The UK economy is back in recession and turnover growth is now at its slowest for over two years.

It's predicted to rise in the next 12 months by just 1.7 per cent - the slowest expectation since the end of the previous recession in 2009. Welsh firms are now revising down their expectations for growth over the coming year.

Exporters are also being hit hard by the adverse economic conditions in Europe. Forty per cent of exports from Wales are sent within the EU, with a further 30 per cent sold to the USA, where growth has also been slowing this year.

The results of the Business Confidence Monitor are echoed by a survey by the Federation of Small Businesses in Wales.

In its Voice of Small Business report, it found almost a quarter of Welsh firms expect a deteriorating business outlook for the next three months.

It also points to the need for more Direct Foreign Investment projects in Wales to help boost growth and stimulate the economy.