It is certainly testing times for Welsh business but there are positive initiatives that we should focus on if we are to retain our optimism about the future.
Economic activity did slowdown in 2018 with a 1% growth in Gross Value Added (GVA) compared with 1.1% in 2017. But this is expected to improve with current forecasts improving to 1.4% until 2021. However, it remains below the forecasted 1.7% growth expected across the UK. Couple that with the global environment and political uncertainty and it results in a drop-in business confidence. Recent reports suggest Welsh Business confidence fell to its lowest level in three months due largely to economic optimism falling sharply for the second successive month. Brexit only adds to our woes with the uncertainty that stems from the ongoing discussions and lack of sight on how it will eventually play out.
Despite this, there are positives to be built upon. If we look at sector growth, a key driver for the Welsh economy is the manufacturing sector which supports thousands of jobs and businesses. With new technological advancements it presents challenges but also opportunities which we must start preparing ourselves to take advantage of to support future economic growth and lead from the front. The arrival of TV and Media companies such as the BBC and Pinewood Studies has created much excitement as well as a boost for jobs. We need to capitalise on the opportunities this brings to firms servicing this sector.
Wales is a diverse country with regions that differ from each other from Cardiff in the South, Newport, Swansea, The Valleys to North Wales. Each has their own story to tell. Cardiff is seen as the main engine of growth in the Welsh economy as well as the significant service centre and economic driver for South Wales. It also finds itself in the spotlight being named in a report, by Ernst & Young, as one of the eight core cities in the UK whose growth will outpace regional growth. Their analysis of eight core cities in the UK (Birmingham, Bristol, Cardiff, Leeds, Liverpool, London, Manchester and Newcastle upon Tyne) saw growth of 2.2% annually on average between 2015 and 2018, whereas large towns grew at 1.8%. EY’s forecast expects this distinction to continue with growth rates of 1.8% for core cities and 1.6% for large towns over the next three years.
The conclusion of the investment in infrastructure in North Wales will boost the ability of firms to move goods around more efficiently but the Welsh Government must consider further investment in infrastructure across the Wales especially in the South.
Another interesting find is KPMG’s UK’s latest Economic Outlook which reports Wales saw the highest increase in employment across the UK in the year ended September 2018 standing at 3.7% whereas the majority of the UK saw less than a 3% increase. With positive initiatives such as The Welsh Government’s Economic Action Plan, which focuses on making the communities we live in stronger and more resilient by building the foundations of our local economies such as care, food, housing, energy, and construction there is definite signs of positive momentum.
I believe that Welsh businesses have solid reasons to be optimistic. The Welsh Government has been investing in infrastructure and this is starting to have an impact with City Deals in Cardiff and Swansea hopefully acting as a catalyst for economic growth in the region.
It’s certainly been an eventful start to 2019, with concerns surrounding political uncertainty and weakening global demand intensifying since the New Year.
However 2019 plays out, Advantedge Commercial Finance are committed to supporting Welsh businesses as they pursue their growth plans. We are the only invoice finance company who have invested in a client operational centre in Wales. With new offices in Newport and an expanding team we are positioned to help more Welsh businesses than ever before. We have up to £100million of funds available to firms who want to increase working capital levels to take advantage of the opportunities as they arise. If you want to discuss how we can help your clients’ then give me a call on 07498052355 or email me on [email protected].co.uk today.