Lloyds has published its latest business barometer
Business confidence levels have fallen in Wales and at a faster rate than in the UK as a whole, according to new research from Lloyds.
The bank’s business barometer for September showed Welsh firms reported lower confidence in their own trading prospects month-on-month, down 43 points at 22%. When taken alongside the optimism in the economy, down 34 points to 9%, this gives the headline confidence reading 16% (versus. 54% in August 2026). Anything above zero is a positive reading.
Overall, UK business confidence fell 12 points to 41% in September, the lowest level since April 2025.
Despite this, companies in Wales report stronger customer and market demand (51%) and increasing inflation or cost pressures (36%) as the main drivers for optimism in the economy.
For those who expect business activity to increase in the coming year, 76% cite stronger customer demand as a catalyst, while 43% point to investment in capacity or technology.
For the next six months, Welsh businesses identified the highest target areas for growth as investment in their team, such as training (46%), entering new markets (38%) and developing their offering, such as new products or services (36%).
Nathan Morgan, regional director for Wales at Lloyds, said: “While confidence has dipped this month, it is positive to see businesses in Wales continue to invest in things that will support long-term growth. “Upskilling is clearly front of mind, with almost half of companies looking to invest in training over the next six months.
In addition to plans to enter new markets and develop new products and services, which shows the business continues to move forward and adapt despite a more challenging background.
“Strong customer demand also remains an important source of optimism, and companies that continue to invest in employees and capabilities will be well placed to make the most of new opportunities as they arise.”
In the overall UK position, Amanda Murphy, chief executive of Lloyds Business and Commercial Banking, said: “While confidence among large companies remains strong, small businesses have seen a fall in sentiment as they continue to navigate higher costs, inflationary pressures and global uncertainty. Overall confidence remains above its long-term average, and most businesses still expect activity to increase in small companies next year. Companies can show in future growth will be important in the coming months.