January 2006 - Welsh Small Business Economic Confidence Survey
The quarterly Bank of Scotland Small Business Banking Survey has revealed that Welsh entrepreneurs are opimistic for 2006.
• Almost nine out of ten Welsh entrepreneurs believe their business will be better off or remain the same in the next 12 months.
• A quarter of Welsh entrepreneurs intend to recruit more staff in 2006.
• Three out of ten plan to invest more in their business in the next 12 months.
Almost nine out of ten (88%) Welsh entrepreneurs believe the performance of their business will be better or stay the same in the next 12 months. Just 11% expect their business to be worse off in 2006.
Over three-fifths (62%) of Welsh small businesses remain confident in the UK economy. Nevertheless, a third (34%) believe general economic conditions will be “worse” in 2006.
After a fall in the previous quarter, there has been a 9% increase in the number of UK businesses expecting to invest more in their business in 2006. Almost three out of ten (29%) Welsh small businesses expect to increase investment over the next 12 months. While this figure is lower than the UK average of 38%, 14% of Welsh small businesses plan to increase their investment by over 10% in the next 12 months. Indeed, almost one in ten (9%) Welsh small businesses expect to invest over 20%. Conversely, just 10% of Welsh businesses plan to invest less.
Increasing staff numbers is part of the business plan for almost a quarter (24%) of Welsh small businesses in 2006. While lower than the UK average of 32%, just 4% of Welsh entrepreneurs believe they will employ fewer staff in the next 12 months (5% for UK).
Turning to the Bank of England Base Rate, a 1% fall in interest rates would be viewed as ‘very positive’ by 16% of Welsh businesses and ‘fairly positive’ by almost a further third (31%). Just 8% of Welsh businesses surveyed thought it would have a negative impact while 49% thought it would make no difference to their business.
Business life is evidently getting tougher with entrepreneurs clearly feeling they are having to work very hard to achieve their success. Despite growing optimism, over two-thirds (69%) of Welsh small businesses claim it has become more difficult to run their businesses over the last five years – a quarter (25%) of Welsh businesses surveyed said it had become much more difficult.
Kevin Gillett, Head of Bank of Scotland Business Banking, commented: “Almost without exception, Welsh entrepreneurs believe their businesses will fair better over the next 12 months and their confidence in the economy is clearly running high. Coupled with almost unprecedented increases in capital investment and strong recruitment intentions, small businesses in Wales are clearly gearing up for a strong performance in 2006.”
Notes to Editors:
• Bank of Scotland Business Banking, part of HBOS Plc, provides a full range of products and services for small businesses with a turnover of up to £1 million pa.
• Bank of Scotland was the first major bank to offer interest on business current accounts and offers the Best Buy Current Account Interest Rate of any High Street Bank (Business Moneyfacts March 2005. Best Buy applies to balances of up to £50,000). Over a third of all Scottish SMEs bank with Bank of Scotland.
• Bank of Scotland Business Banking is rapidly expanding its presence in England and Wales and all 700 Halifax branches now provide Business Banking facilities. The 100 largest branches in England and Wales also have a Business Banking Manager.
• The Opinion Research Business interviewed by telephone a total of 1,078 owners and managers of small businesses (up to a turnover of £1m pa) throughout the UK, including 100 in Wales between 25th November and 14th December 2005. Interviews were conducted on the telephone and the statistical margin of error in the data +3.1%.
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Further information, journalists should contact:
Barry Gardner Bank of Scotland
Tel: 0131 243 7194 / 07900 227292
Email: barrygardner@hbosplc.com
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