NEW figures have revealed a sharper fall in Welsh business activity, with firms cutting jobs at the fastest rate since September 2020.

The latest NatWest Wales Growth Tracker showed that while the decline in new orders eased for the second month running, overall output fell more quickly in May as businesses faced higher costs, weaker demand and growing uncertainty.

The headline Wales Business Activity Index fell to 45.8 in May, down from 47.9 in April. Any reading below 50 indicates contraction.

The drop was the sharpest since September 2025 and placed Wales among the weakest-performing UK areas, with only the East Midlands and Northern Ireland recording faster falls in output.

JOB CUTS DEEPEN

Welsh private sector firms also reported a further fall in staffing levels, with the rate of job shedding the steepest in almost six years and the sharpest of all 12 UK nations and regions monitored.

Businesses said lower new order intakes and the higher cost of employment were behind the reduction in headcounts.

Backlogs of work also continued to fall, suggesting weaker demand was allowing firms to clear outstanding orders more quickly.

ORDERS STILL FALLING

New sales fell for the fourth month running, although the rate of decline eased and was only slight.

NatWest said part of the improvement may have reflected temporary stockpiling by customers amid higher prices and supply challenges, rather than a sustained recovery in demand.

Business confidence also weakened, although firms remained generally optimistic that output would rise over the next 12 months.

INFLATION PRESSURE

The report said input costs rose at the sharpest pace since November 2022, driven by higher fuel, energy and material costs.

Welsh firms also increased their selling prices at a faster rate, with charge inflation reaching its highest level for more than a year.

Jessica Shipman, Chair of the NatWest Cymru Board, said: “May data indicated a softer decline in new orders at Welsh firms, however, some of the uplift in the seasonally adjusted New Business Index stemmed from a temporary bout of stockpiling at customers amid higher prices and supply challenges.

“In fact, activity levels dropped at a sharper pace and employment contracted at a rate not seen since September 2020.

“Although still confident of output growth in the coming 12 months, spare capacity and greater uncertainty led firms to lower their expectations for the year-ahead outlook.”

She added that inflationary pressures were continuing to influence business and customer decisions, with the conflict in the Middle East pushing up material, fuel and energy costs.

EXPORT CONDITIONS IMPROVE

There was better news for exporters, with the Wales Export Climate Index rising from 50.7 in April to 51.1 in May.

That signalled the strongest improvement in export conditions for three months, supported by stronger output growth in Ireland and the Netherlands.

Activity also continued to rise in the United States, although Germany and France remained in contraction.

The NatWest Wales Growth Tracker is compiled by S&P Global from responses to questionnaires sent to Welsh companies in the manufacturing and services sectors.

PUBGOERS are being urged to leave their pint glasses behind this summer amid warnings that thefts are adding pressure to already struggling pubs.

The call comes after Jeremy Clarkson revealed that his Oxfordshire pub, The Farmer’s Dog, is losing up to 400 pint glasses a week.

Small business comparison site Bionic said the issue is not confined to one venue, with millions of adults admitting they have taken tableware from pubs, bars or restaurants.

Laura Court-Jones, Small Business Editor at Bionic, said: “Many people see taking a pint glass home as a harmless act, but the costs can quickly add up for pubs, bars and restaurants already facing rising expenses and tight margins.

“If you want to support UK hospitality and help your favourite venues thrive this summer, leave all pint glasses behind.”

Bionic said glass theft can also have consequences for customers.

Ms Court-Jones added: “Stealing glassware from a pub might seem like a minor offence, but it is still theft. Licensed premises have the right to refuse service and may bar individuals caught stealing.

“In some cases, the police may be called. While a prison sentence is unlikely for a minor offence, individuals may face a formal warning, a fine, or a criminal record.”

The company said pubs and bars can reduce losses by using CCTV, setting clear house rules, switching to unbranded glassware, and checking whether their insurance covers stolen or damaged stock.

Hospitality businesses across the UK have faced rising costs in recent years, including energy, staffing, food, drink and supplies, with many warning that even small losses can have a serious impact on margins.

Caption: Jeremy Clarkson at The Farmer’s Dog pub, where glass theft has reportedly become a major problem.

A CALL to keep a building which would partly be used a distillery at a Pembrokeshire farm which produces award-winning sheep milk-infused gin has been turned down by county planners.

In an application to Pembrokeshire County Council, Steven and Julie Ayers of Fifth Flock Spirits Ltd through agent Johnston Planning Ltd sought permission for the retention of a replacement building for farm diversification purposes incorporating a gin distillery with associated function/tasting room, reception area for farm businesses, including the distillery, a kennels and caravan site, along with offices and associated storage facilities at Nash Mountain Farm, Sardis.

Two previous similar 2024 and 2025 applications have been refused, the latest scheme removing some previous elements.

A supporting statement said the building would be used for farm diversification purposes for a number of established rural enterprises on the holding “but primarily in connection with Fifth Flock Spirits Ltd, a family run drinks company specializing in gin infused with milk derived from the resident flock at Nash Mountain”.

It said the 2023-erected building had replaced an earlier long-standing dilapidated farm building on the site, and is intended to play host to the three established farm enterprises which are run in conjunction with the main agricultural operation: Nash Mountain Kennels, Nash Mountain Caravan and Camping Site and primarily Fifth Flock Ltd.

It said internal works had yet to be completed, and, in addition to the retention of the building, the application also seeks permission for some external works which have not yet been carried out.

The statement said the Ayers family has farmed at 26ha Nash Mountain, which has a flock of 168 East Friesian sheep, for some five generations, the limited acreage meaning “the agricultural mainstay is not sufficient to sustain a viable business,” leading to the farm diversifications, with Fifth Flock the latest.

It said, in addition to the main farming operation, Nash Mountain also gains income from an on-site wind turbine, a caravan site, a boarding kennels with cattery, and Fifth Flock Ltd.

On the gin side, the statement says: “Fifth Flock Spirits Ltd Fifth Flock has operated from Nash Mountain since August 2025. It is at core currently a drinks enterprise based on the production of gin and rum infused with sheep’s milk, however, as set out in the accompanying business plan, the intention is to expand the offer into other sheep-based products to capitalise on the home flock.

“Since launching the enterprise has exceeded expectations with strong demand and accolades including A Taste of Pembrokeshire Award at the Pembrokeshire Food and Farming Awards in December 2025.

“Firth Flock currently source their gin from an independent distillery in Gorgeddan, Ceredigion however the intention, as reflected in this submission, is to develop the distilling element on-site and include it as part of an immersive visitor experience focussing on the home flock.

“Firth Flock has rapidly become a cornerstone of the enterprise at Nash Mountain and whilst the building at the centre of this proposal may have been premature there is a strong case for its retention as part of the overall rural enterprise on the holding.”

It adds that the Ayers are actively exploring diversification into other wool and sheep-based products.

The application was refused on the grounds including it was not demonstrated a countyside location was needed and there was not “sufficient evidence of a genuine and established rural enterprise necessitating the development,” adding: “In particular, the primary distilling process does not currently take place at the site and instead relies on off-site production, with only a future aspiration to relocate such activities.

“As a result, the proposal represents a speculative form of development that lacks a clear and direct functional link to the agricultural holding.”

It went on to say the scale of the proposals “introduces a level of intensity and built form more akin to a standalone commercial or tourism enterprise, rather than a modest farm diversification scheme”.