Welsh Businesses See First Rise in New Orders for Eight Months

Welsh businesses see first rise in new orders for eight months

Mark Mansfield Welsh businesses recorded their first increase in new orders for eight months in September, but continued to cut jobs as cost pressures intensified. The latest NatWest Wales Growth Tracker found that business activity grew at its fastest pace since May 2025, although the increase remained slight and below the UK average. Its business […]

Welsh Business Confidence Hits Eight-Month High Despite Continued Job Cuts

Business confidence in Wales has climbed to its highest level in eight months as new orders return to growth, although companies remain cautious about recruitment and rising operating costs. The latest NatWest Cymru Growth Tracker suggests that conditions across the Welsh private sector improved during September, with businesses reporting their first increase in new orders since January. The improvement helped drive a modest acceleration in business activity, with the Wales Business Activity Index rising to 50.6 in September from 50.4 in August. The reading represented the fastest rate of growth since May 2025, although expansion remained marginal and below the UK average. Stronger demand, supported in part by new client wins, contributed to a rise in business optimism. Confidence about future output reached its highest level since January, placing Welsh firms among the most optimistic of the 12 UK regions and nations monitored. However, the improvement in sentiment has yet to translate into renewed recruitment. Employment levels continued to fall during September, with Welsh businesses reducing workforce numbers at a faster rate than the UK average. Although the pace of job losses eased to its slowest since December 2025, the figures suggest companies remain reluctant to expand staffing despite signs of recovering demand. Businesses also continued to work through outstanding orders, with backlogs declining at the fastest rate of any monitored UK area. This points to spare capacity within the Welsh private sector, potentially limiting the immediate need for additional employees. Meanwhile, cost pressures remained a significant concern. Operating expenses increased at a faster rate during September, although Wales recorded the lowest rate of input cost inflation among the 12 monitored UK areas. Rather than passing the full impact of rising costs on to customers, businesses appeared to be prioritising sales growth. Selling prices increased at their slowest pace since February, suggesting firms are seeking to remain competitive as demand begins to recover. Jessica Shipman, Chair of the NatWest Cymru Board, said: “A renewed improvement in demand conditions spurred a stronger expansion in output and a notable uptick in business confidence for the year ahead in September. Although only slight, growth in new orders was the first seen since January, and helped support the strongest quarterly performance in the Welsh private sector in 2026 so far.” She added: “Greater demand was insufficient to pull firms out of retrenchment mode, however, as employment fell at a solid pace amid further signs of spare capacity.” The latest figures present a mixed picture for the Welsh economy heading into the final quarter of 2026. While the return to new business growth and stronger confidence suggest that conditions may be stabilising, the continued reduction in employment and pressure on profit margins underline the challenges facing companies. The findings also highlight a potential gap between improving business sentiment and the willingness of employers to invest in additional workforce capacity. With new orders only marginally higher and output growth remaining below the UK average, the coming months will be important in determining whether the improvement in confidence develops into a more sustained recovery for the Welsh private sector.