The economic slowdown experienced immediately after the EU referendum has continued but Welsh businesses are adapting and planning for a post-Brexit future, according to the latest results from the Welsh Business Barometer.

The findings of the Welsh Business Barometer for Q4 2016, released by the South Wales, Mid Wales and West Cheshire & North Wales Chambers of Commerce, suggest the economy in Wales is still growing, with more businesses reporting their sales are increasing than decreasing and more businesses stating that they are increasing their workforce than decreasing it.

However, the gap between these figures is closing, leading to concern that the slowdown experienced following the Brexit referendum result is continuing.

Heather Myers, director of the South and Mid Wales Chambers of Commerce, said: “There is no doubt that the decision to leave the European Union has already had a significant impact on the economy.

“But we have excellent businesses here in Wales, businesses that are adapting to the situation and preparing for a bold future outside the EU.

“If businesses are to remain positive, more guidance must be given by the government so that the Welsh economy can flourish after life in the EU, and that Wales can continue on its journey to becoming a prosperous nation.”

The Welsh Business Barometer is an independent survey of business performance and confidence, which acts as an early indicator of the future economy in Wales. The latest findings were presented to businesses across Wales at the Wales Air Ambulance Ty Elusen base in Llanelli.

Areas of concern for the Welsh economy include the number of businesses who are predicting a fall in profits during 2017, with 28.9 per cent expecting their profits to drop in the next 12 months, a 5.6 per cent increase on Q3’s results that followed the EU referendum.

In addition, the number of employers experiencing difficulties in recruiting was 4.49 per cent higher in Q4 than in Q3, as Welsh businesses in a range of sectors continue to face a skills gap.

“Despite suffering no real loss of turnover from Brexit, recruitment is something we’ve found increasingly difficult over recent years,” said Graham Waters, managing director of GTW Developments Group Ltd, a manufacturer of specialised tools used in composite materials for textiles and aerospace industries based in Pontypool.

“We’ve successfully recruited and trained school leavers in the past to degree and even PhD level, but over the past few years there has been a marked decline in the amount of 16-year-olds interested in engineering roles.

“This is a real concern for us, as we have projections for a 50 per cent annual growth rate over the next four years - something that will be hard to sustain if we cannot bring in young new members of staff to match our growth and innovation plans.”

Ms Myers said: “The high proportion of businesses struggling to recruit the right staff has been a consistent theme of our Welsh Business Barometer. The development of the new school curriculum and future skills needs is underway but efforts need to be boosted this year to avoid a whole generation of Welsh workers lagging behind counterparts in other countries, which will hinder our economy.”

Despite this, the findings also suggest plenty of reasons to remain positive about Welsh business in 2017. In the last three months of 2016, 32.4 per cent of businesses reported increased export sales compared to 22.1 per cent reporting decreased sales.

This is a positive difference of 10.34 per cent, down 1.87 percentage points from the previous quarter.

In addition, 32.1 per cent of businesses reported increased export orders compared to 23.1 per cent reporting a decrease in orders. This is a positive difference of 8.96 per cent, down 1.22 percentage points from the previous quarter.

Ms Myers said: “Overall, our findings suggest growth will continue in 2017, albeit at a more modest pace, and it seems that businesses are doing their best to trade through the uncertainty and seize opportunities as they arise.

“But we need clarity on the UK government’s Brexit negotiations or we run the risk of this slowdown turning negative in the medium term. Welsh businesses need to know what the plan is.

“They will also need support to help them through this year, whether financial or with help in accessing new markets in the UK or beyond. We need to show the world that Wales is open for business.”