Novuna Business Finance has today published its first report on small businesses in Wales, based on data collected every quarter over the past nine years. The Welsh Growth Report: Small business leader outlook over time (2015-2023), is an evaluation of business confidence in the region during this time, examining the impact of various challenges faced by these businesses and their resilience to them, in comparison with businesses in other parts of the UK.
The key findings include:
- Today, the percentage of Welsh enterprises forecasting growth is almost half of what it was nine years ago.
- Welsh business owners have been impacted more by the long tail of Brexit and Covid than businesses in the rest of the UK. For the last four years, confidence levels remain lower than they were before 2017.
- Percentage of Welsh businesses predicting growth over time (compared to the national average)
- 85% of small business owners say that they are facing more obstacles now than they before the pandemic.
- Brexit has left a lasting impact on Welsh businesses, with repercussions continuing from Q4 2020 to the present day. Currently, 22% of businesses in Wales are still grappling with the consequences of Brexit, setting Wales apart from the rest of the UK in terms of prolonged growth challenges.
- In 2023 alone, a staggering 86% of business owners confessed to losing sleep over a range of business-related issues.
- Despite the fact that just 3% of small business leaders in Wales predicted growth in Spring 2020, by Q3 2020, 89% of Welsh small businesses said they were working on new initiatives to secure future growth – the highest of any UK region and a record-high for Wales over the last decade.
Jo Morris, Head of Insight at Novuna Business Finance commented: “A snapshot of small business outlook in Wales over the last decade presents a picture that varies to the national average. Whilst growth forecasts for the UK at large have remained remarkably consistent, in Wales the picture has fluctuated more significantly.
“Today, the picture in Wales has stabilised but quarter-on-quarter growth projections since 2022 are lower than they were before 2017. This suggests the long-term legacy of Brexit and Covid are still felt. Indeed, many of the growth barriers cited by Welsh business leaders link to this – with fewer enterprises looking to expand overseas and ongoing challenges with hiring skilled labour.
“Looking back over the last decade, when there have been economic shocks small business growth forecasts have suffered more profoundly in Wales. Set against this, the resilience of Welsh business owners to adapt and look at new long-term plans to secure future growth has been stronger. Based on the research our view is that, at some point, this tenacity will pay off – and at some point we will see a surge in the overall proportion of Welsh small businesses that predict growth.
“Our Business Barometer study looks at the UK picture over time, but in recent years we have seen divergent trends within both Wales and Scotland – findings which underline that more needs to be done to better understand and support the issues that Welsh and Scottish businesses face. Through 2024, we will continue to follow the trends for Wales and we will also publish our first report on Scottish small business outlook over time.”