Business confidence in Wales is now among the lowest in the UK, according to the latest Business Barometer report from Lloyds Bank Commercial Banking.

Here, David Beaumont, regional director for Wales, discusses the findings, and reveals the steps firms can take to help them to continue to grow during these uncertain times.

Our research has recently revealed that business confidence in Wales is now among the lowest in the UK, standing 13 points below the national average and 32 points lower than neighbouring region, the West Midlands.

Businesses are becoming more cautious about their own prospects, which has led them to scale back investment plans.

In fact, the latest research revealed that only a net balance of 10 per cent of firms expect to hire more staff over the next 12 months in July, down from February’s high of 21 per cent. But halting expansion during times of uncertainty isn’t always advisable, as there could be new opportunities for growth that business leaders may not have previously considered.

Don’t ignore the opportunities

With the value of sterling hitting an 11-month low recently, it’s thought that British exports could become more attractive to overseas investors.

In fact, recent government research has revealed that exports in Wales for the year ending March 2018 were up 7.1 per cent compared with the same period last year.

This additional interest from overseas could potentially lead Welsh companies to forge new trade relationships with businesses in territories that they haven’t previously considered.

But exporting to a new region or for the first time can be daunting, which is why there is a range of support available to help firms trade with confidence.

At Lloyds Bank we’ve developed our International Trade Portal, to provide companies with all the information they need to identify a new market, understand the complexities of trading overseas and build relationships with those in their selected regions.

The government also recognises the importance of Welsh trade, and at last month’s Royal Welsh Show, International Trade Secretary, Liam Fox, announced that Swansea University will host a Board of Trade in November.

The two-day event is designed to celebrate Welsh export achievements and encourage more companies to begin working with businesses overseas.

But the weak pound doesn’t only make the products and services that firms send overseas more attractive, it also makes it more affordable for tourists visiting the UK.

This is positive news for Welsh tourism firms and, with international tourists generating more than £369m for the Welsh economy last year, it’s vital companies in the sector explore ways that they can take advantage of the new opportunities an increase in visitor numbers may bring.

Listening to businesses

Despite the potential opportunities to expand, many firms are understandably concerned about the current lack of clarity surrounding the UK’s exit from the European Union.

Speaking to businesses across the nation many remain resilient in the face of uncertainty, which has made many cautious about expansion.

It’s hoped that some clarity will come within the coming months, but it’s vital that companies regularly revisit their business plans during this time to ensure that they have the resources available to navigate any challenges and continue with their expansion plans.

At Lloyds Bank we’ve also developed a specialist working capital management tool, which can help businesses to evaluate their cash flow and collection cycles and identify where pressure points lie within their company. With this increased understanding, firms can assess if they can release any excess working capital that can be used to help them to respond to unforeseen opportunities or threats.

There are also a range of specialist finance products available to help companies access funds to invest in growth. For example, a brewery in Newport that has secured a new contract could use an invoice finance facility to unlock the capital needed to boost production, allowing them to invest in the additional staff and products needed before the final bill is paid.

Wales is full of ambitious and thriving businesses, but ongoing political and economic ambiguity is making many cautious about the future.

It’s vital that in times of unpredictability companies don’t halt their expansion plans entirely. Instead they should seek advice and review their business plan so that they can adapt easily to changing circumstances or capitalise on any new opportunities that may arise.