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Business

Small business confidence remains low as costs rise and jobs are put on hold

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Survey shows SMEs still cautious on hiring and investment, despite a modest lift in new orders

UK SMALL firms are still feeling gloomy about the economy, with confidence stuck near historic lows as weak growth and rising costs continue to bite, according to a quarterly survey by ACCA and the Institute of Management Accountants.

The UK edition of the Global Economic Conditions Survey (GECS) found confidence among small and medium-sized businesses dipped slightly in the final quarter of 2025, after a sharper fall in the previous quarter. The findings suggest many SMEs are still struggling to shake off the depressed mood that set in at the end of 2024.

Measures tracking investment and staffing also point to caution. Only a small number of respondents said their businesses – or their clients – had increased spending on capital projects over the past three months, while a higher-than-normal proportion reported cutting back.

On employment, the survey recorded a notable share of businesses reducing headcount or pausing recruitment, with relatively few saying they were hiring or restarting recruitment.

There was, however, a small sign of improvement in future demand. The survey’s forward-looking New Orders Index rose in Q4. While still weak by long-term standards, it was reported to be well above the low point seen during the COVID-19 pandemic – suggesting the underlying picture may not be as bleak as other indicators imply, and that some firms may be positioning themselves for better trading conditions.

Lloyd Powell, head of ACCA Cymru/Wales, said confidence remains “fragile,” arguing that businesses have seen little recovery since a sharp drop following the 2024 Budget. He added that the decline after the 2025 Budget was smaller, but said the impact on SMEs and the wider economy remained significant.

Powell said the modest improvement in new orders could indicate some firms are starting to consider investment again as they spot opportunities emerging.

Cost pressures, meanwhile, remain a major concern. More than four in five respondents reported higher operating costs during Q4, and early warning signs of corporate stress – including late payment issues and worries about customers or suppliers going out of business – stayed high compared with historic levels.

Jonathan Ashworth, ACCA’s chief economist, said the Q4 indicators continue to paint a “very downbeat” picture for UK SMEs, with confidence still struggling to recover from the lows seen at the end of 2024. He warned that 2026 is likely to remain difficult, citing sluggish UK growth and global uncertainty.

The survey notes that further interest rate cuts could ease some pressure on businesses, though ongoing domestic cost inflation suggests the Bank of England may have to approach any reductions carefully.

 

Business

Tenby railway station at scene of violent disorder allowed to sell alcohol

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A CALL to sell alcohol from a coffee shop at a Pembrokeshire railway station, which recently a mass violence incident which led to 11 arrests and several people being taken to hospital, has been given the go-ahead.

At the June 4 meeting of Pembrokeshire County Council’s licensing sub-committee, members were asked to consider the granting of a new premises licence for Lisheens Coffee Pod, Tenby Station, which included the sale of alcohol off-site from 11am to 10pm, seven days a week.

Emergency services were called to the station at around 9.50pm on Tuesday, April 7, following reports of disorder involving a group of people.

During the incident, one individual was reported to be carrying a knife. Four teenagers, aged 13 to 17 were injured and taken to hospital.

A total of 11 arrests for offences including grievous bodily harm and violent disorder were made. All of those arrested were aged between 13 and 19 years old and all local to the Tenby and Pembroke Dock area, police have previously said.

While the incident was unconnected to the licensing application, it was raised in objections to the scheme.

A report for members of the committee said two objections to the application by Mrs Nicola Nolan were received, from The British Transport Police, as a responsible authority, and another from a lease of the railway building, which said: “It encourages group gatherings, encouraging vandalism, and violence such at stabbings by group gatherings as of April 7.”

Jessica Jones, Designing Out Crime Officer for British Transport Police, who later spoke at the meeting had raised concerns “based on crime data, operational policing considerations, lone-working risks, public safety concerns, and Violence Against Women and Girls (VAWG) risks”.

Her report said, over the past two years, there had been 12 incidents of violence, three serious public order offences, and one motor vehicle crime incident, the majority between 9pm and 11pm, a timeframe overlapping the proposed hours of alcohol sales, raising concern that alcohol availability “may further exacerbate existing issues of violence and disorder”.

That report added there were many outlets in Tenby town centre selling alcohol, questioning the need for a further facility at the station, and there was “significant concern regarding the risk to a lone worker having to refuse alcohol sales to intoxicated individuals or manage customers who refuse to leave”.

It went on to say that, while British Transport Police already deploy dedicated policing operations throughout the six-week summer holiday period to manage increased passenger numbers and deter crime, “introducing another alcohol sales point during these peak periods may heighten existing risks”.

Jessica Jones later told committee members introducing the scheme in Tenby would mean it was the only such offer at an unmanned station in Wales.

Speaking at the meeting, Barry Nolan, husband of the applicant, said it was hoped to supplement the ‘coffee pod’ with “genteel” and “trendy alcoholic products” such as wine, “really cool craft beer,” and Barti Ddu rum in cans for consumption elsewhere rather than “pints of lager and triple vodkas”.

He said the facility wouldn’t lead to youths congregating due to the products being at the more premium price end; also offering security if needed.

He later offered a reduction in alcohol serving hours to 8.30pm, with committee chair Cllr Tim Evans mooting an 8pm finish.

After retiring to deliberate, members agreed to the granting of the licensing, subject to an 8pm cut-off, wishing the applicants well in their business.

 

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Business

‘Longest continuously run Welsh pony stud in the world’ development plans approved

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PLANS for new horse breeding sheds in north Pembrokeshire for “the longest continuously run Welsh pony stud in the world,” which is seeking to relocate to the county, have been given the go-ahead.

In an application recommended for approval at the June meeting of Pembrokeshire Coast National Park’s development management committee, Mr Davies, through agent Harries Planning Design Management, sought permission for the construction of an agricultural buildings for horse breeding stables at Let Wen, Felindre Farchog.

A supporting statement accompanying the application said a typical stable building to house breeding horses was sought, along with a building for feed, dung and implements to keep and maintain the horses within the site and two additional buildings proposed for general storage of items to run the agricultural business.

Detailing the background to the application, it said: “The horses on this site are breeding horses and the business trades under the name The Ceulan Stud and is the longest continuously run Welsh Pony Stud in the world.

“The business originally operated near to Aberystwyth, before relocating to Rhondda Cynon Taf for over 62 years. The business has now bought land in north Pembrokeshire and seeks to relocate here. The business operates with 10 breeding mares and two stallions and produces 10 foals per year all for direct sale.

“The proposed site allows for safe breeding of the stock, with the surrounding land being used for turning out the stock, which are only brought in to breed. The applicant does not ride the horses, and they are raised as livestock for sale.”

The application was brought for committee consideration as it was recommended for approval despite objections from local community council Nevern on the grounds including it being “a very large complex on a greenfield site,” with a loss of valuable agricultural land, and concerns about accessibility to and from the highway.

An officer report recommending approval said: “The proposal includes the erection of a stable block containing three stables together with ancillary feed storage, tack room, hay and implement storage buildings, turnout paddock, dung storage area, access improvements, permeable hardstanding, landscaping and biodiversity enhancement measures.

“The development has been amended following pre-application discussions to reduce the scale of development and minimise the amount of Grade 3a Best and Most Versatile agricultural land affected.”

It concluded: “In visual terms, whilst the proposal would introduce built development into part of an open field, the buildings are modest in scale and agricultural in appearance.

“The proposal also incorporates substantial mitigation measures including earth bunding, ecological buffers and significant native hedgerow planting intended to soften and assimilate the development into the wider countryside landscape over time.

“As such, the proposal is not considered unduly visually intrusive within the context of the surrounding agricultural landscape.”

The application was conditionally approved by committee members.

 

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Business

Innovation slump raises concern for Welsh businesses

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THE SHARE of UK businesses classed as “innovation-active” has fallen sharply over the past decade, raising concerns about the ability of firms in Wales and across the UK to compete, grow and adapt.

New figures show that only 34% of UK businesses were innovation-active between 2022 and 2024, compared with 53% ten years earlier — a fall of 19 percentage points.

The National Centre for Universities and Business (NCUB) said the decline should worry policymakers, universities and employers, particularly at a time when productivity, investment and economic growth remain under pressure.

For Wales, the figures are especially relevant. Many Welsh businesses are small or medium-sized firms operating in rural, coastal or post-industrial communities, where access to finance, skills, research partnerships and new technology can be more limited than in larger urban centres.

The warning comes despite repeated political promises to make the UK a science and technology leader. NCUB says the problem is not a lack of research talent, but a failure to turn ideas into commercial activity across the wider economy.

Rosalind Gill, Director of Policy at NCUB, said: “A shrinking base of innovative businesses is a serious concern. Innovation is not confined to a handful of frontier sectors or high-growth companies. It depends on businesses across the economy investing, adapting and bringing new ideas, products and services to market.

“The UK has many strengths. We continue to produce world-class research, generate promising discoveries and collaborate effectively across institutions. Innovation is not created by research alone, however.

“It depends on businesses investing in R&D and innovation, shaping demand, adopting new technologies and working with the research base to solve real-world challenges.”

Ms Gill said the Government’s focus on growth, innovation, reforms to UK Research and Innovation, and a new Industrial Strategy were welcome, but businesses needed clearer long-term priorities and simpler routes from research to market.

She added: “When we speak to business leaders, they consistently highlight the importance of clearer long-term priorities, stronger pathways from research to market, reduced complexity across the research and innovation system, and greater confidence that the UK is a place where innovative firms can start, scale and succeed.”

The NCUB said the challenge now is to ensure that research strengths translate into business investment, commercial activity and economic impact.

For Wales, that means ensuring universities, colleges, manufacturers, farming businesses, tourism operators, renewable energy firms and digital start-ups are not left behind as the UK attempts to rebuild its innovation economy.

 

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