Business confidence in Wales rose 10 points during February to reach 24 per cent, according to the latest Business Barometer from Lloyds Bank Commercial Banking.

Welsh companies reported higher month-on-month confidence in their business prospects at 38 per cent, while economic optimism remained the same at 10 per cent.

Together, this gives an overall confidence of 24 per cent. While this is 10 points above last month’s figure of 14 per cent, it remains below the UK average.

Overall UK confidence fell two points to 33 per cent, driven mainly by a fall in firms’ confidence in their own business prospects, which fell four points.

Welsh companies’ hiring intentions showed that a net balance of 21 per cent of businesses across the nation expect to hire more staff during the next year, up 13 points on last month.

The Business Barometer questions 1,200 businesses monthly and provides early signals about UK economic trends both regionally and nationwide.

Allan Griffiths, regional director for Wales at Lloyds Bank Commercial Banking, said: “It’s positive to see that companies across the nation have shaken off the January blues and are beginning to become more positive about the year ahead.

“The increase in overall confidence can be attributed to firms feeling more optimistic about their business prospects, with sentiment rising 21 points compared with a month ago.

“Despite this, overall confidence is still below the national average, indicating lingering caution among Welsh businesses amid continuing economic uncertainty.”

Welsh firms are increasingly finely balanced on the issue of Brexit, with a net balance of just two per cent of businesses stating that the UK’s exit from the European Union was having a positive impact on their expectations for business activity, down six points on a month ago.

Overall confidence was highest among businesses in London, at 50 per cent, followed by the North East and East Midlands, both at 42 per cent.

Businesses in the South East were least confident, with an overall confidence 10 points below the national average of 33 per cent.

The manufacturing sector reported the highest level of overall confidence at 41 per cent, overtaking construction, where confidence dropped five points to 37 per cent in January.

Elsewhere, confidence in consumer services – which includes retail – rose from 27 per cent to 31 per cent, driven by stronger retail sentiment, which leapt 20 points from 17 per cent to 37 per cent.

Hann-Ju Ho, senior economist for Lloyds Bank Commercial Banking, said: “Across the country, firms remain resilient and have maintained last month’s increase in economic optimism.

“Nationwide, the survey is consistent with slightly stronger growth in GDP in the first quarter of 2018 than was seen in the last quarter of 2017.”