Good news for businesses

Mid Wales-based businesses are this morning reporting that they are starting 2015 in a strong position.

The news indicates that there is sustained confidence and growth in the Welsh economy, although recruitment challenges remain a cause for concern. 

The latest Quarterly Economic Survey, released today (January 8) by the South and Mid Wales Chambers of Commerce and the West Cheshire and North Wales Chamber of Commerce, shows that UK and international sales have increased for mid Wales-based businesses over the last 12 months, and most businesses are looking ahead to 2015 with optimism. 

The survey monitors the performance of businesses across Wales and acts as a barometer for the strength of the Welsh economy.

The majority of businesses (87.1%) surveyed reported improving or consistent sales in UK markets, an increase of 2.8 percentage points since the start of 2014, but there was a decrease in the number of sales in international markets of 18.8 percentage points, falling from 95.8% in Q1 to 77% in Q4.

While the number of businesses recruiting staff has remained reasonably constant during the year, the number of businesses recruiting full-time and permanent staff has been steadily growing throughout 2014. Recruitment for full-time staff is up from 79.2% in Q1 to 85.7% in Q4 and for permanent staff up from 41.7% in Q1 to 71.4% in Q4. This is against a backdrop of most businesses (93.3%) stating that they are experiencing difficulties in recruiting.

Commenting on the latest figures, Graham Morgan, director of the Mid Wales Chamber of Commerce, said: “Our final survey for 2014 shows that businesses in mid Wales are feeling confident as we enter the New Year. The move towards businesses recruiting more full-time and permanent staff is good news for the economy on two levels. Firstly, it demonstrates that businesses feel confident that they can take on the responsibility of employing people in the long-term, but it also means that consumers have more money in their pockets to spend due to greater job security.

“This business confidence is further demonstrated by the number of organisations that have seen an increase in their sales, in both the UK and export market, during the course of 2014. This, coupled with the fact that more businesses are anticipating that their profits will increase in 2015, indicates that the Welsh economic recovery is here to stay.

“However, we are increasingly concerned about the number of businesses reporting that they are experiencing difficulties in recruiting staff. We have frequently raised the need to improve the skills of the future and current workforce, and called for better partnerships between the public, private and academic sectors, and, given that this has been a trend throughout the last year, this is clearly now an urgent problem that needs to be addressed.

“We cannot stifle economic growth in Wales because our workforce is unable to deliver business’ needs. The reality of the situation is that companies will look further afield, beyond the Welsh and even UK borders, to identify and attract the talent and skills base that they require. This cannot continue if we are to develop a truly sustainable Welsh economy.”

The number of businesses investing in equipment decreased during 2014 (from 36.2% in Q1 to 28.6% in Q4), as did the number of companies increasing their investment in training from 37% in Q1 to 28.6% in Q4).

Mr Morgan added: “We are concerned to see a reduction in the number of companies increasing their training budgets. While there is a clear skills gap in recruiting staff, businesses themselves need to take responsibility for upskilling their workforce.

“Likewise, there is a great deal more that could be done to support those looking to enter the jobs market to ensure they are work ready for employers. In our Campaign for Welsh Business, published at the end of 2014, we called for a national workplace basic skills training programme. This would be accessible to all adults to help improve language and numeracy skills for both the current and future workforces.

“We also want to see drastic improvements in Wales’s ranking in the international PISA test results, as well as a thorough future workplace skills review so that the next generation of Wales’s workforce are adequately equipped to support the business community.”