Business
Welsh business confidence soars despite February’s output decline
WELSH business confidence has surged to its highest level since November 2021, despite facing output challenges in February. This optimism in the private sector shines against a backdrop of modest economic contraction, according to the latest NatWest Wales PMI® Business Activity Index. The index, which dipped from 49.9 in January to 47.5 in February, highlights a modest reduction in activity – marking the most significant decrease since the previous October. Notably, this places Welsh firms alongside those in the North East as the joint-lowest performers in the UK, primarily attributed to subdued customer demand and ongoing supply chain difficulties.
Despite a continuous ninth-month decline in new orders, February saw the slowest pace of this downturn, with some businesses noting early signs of recovering demand conditions. However, the enduring cost-of-living crisis continues to suppress sales, creating a fractional downturn in new business that contrasts with a modest expansion across the UK.
Remarkably, February witnessed a significant uplift in business confidence among Welsh private sector companies. This renewed optimism, the most robust since late 2021, aligns closely with the broader UK trend. Businesses are buoyed by prospects of product range extensions, customer base expansions, and anticipated stronger client demand.
However, Welsh firms reported a seventh consecutive month of workforce reductions, although the rate of job losses has slowed considerably, marking the softest drop since August 2023. Despite efforts to enhance efficiency and manage costs by not replacing voluntary leavers, the reduction in staff numbers remains significant, outpaced only by Yorkshire & Humber across the UK.
Furthermore, Welsh companies have seen an ongoing decrease in outstanding business since May 2022, with February’s contraction marking one of the sharpest declines. This reduction in backlogs of work underscores the broader challenges faced by the region’s private sector.
On the inflation front, Welsh firms experienced an accelerated increase in average cost burdens during February, with input prices climbing due to higher raw material costs and rising wages. This upturn in inflation, although less severe than the UK average, was the sharpest since May 2023. In response, Welsh companies raised their selling prices significantly, with service providers leading this charge as they passed increased costs onto customers.
Jessica Shipman, Chair of the NatWest Cymru Regional Board, reflects on the dual nature of the current economic landscape for Welsh businesses. While acknowledging the sharper fall in output and the weight of supply chain issues on production capacity, Shipman highlights the fractional easing in the decline of new business and the buoyant business confidence. This optimism is underpinned by strategic expansions and marketing investments, despite the uptick in inflationary pressures driven by higher wage and imported goods prices. Shipman notes the continued trend of cost-cutting through workforce reductions, even as business confidence strengthens and the pace of job shedding eases, signalling a cautious yet hopeful outlook for the Welsh private sector.
Business
52 homes to be built in Roch as scheme gets final sign-off
THE FINAL stage of approval for a near-£10m Pembrokeshire residential development of 52 homes has been given the go-ahead.
Back in April, members of Pembrokeshire County Council’s planning committee backed an application by Wakefield Pembrokeshire Ltd for the development, which includes four one-bed affordable housing units, on land near Pilgrims Way, Roch.
18 objections to the scheme were received, raising concerns including an “inadequate” affordable housing level, it being a high density development for a rural area, a loss of green space, the size of some of the homes, and pressures on existing services and facilities, and fears it may lead to an increase in second homes.
Nolton & Roch Community Land Trust (N&RCLT) has raised its concerns about a lack of affordable homes at the development, calling for a 20 per cent affordable homes element, as recommended by policy.
An officer report for members, recommending conditional approval, said: “It is apparent that the proposed development is not fully policy compliant, insofar as it cannot deliver the indicative 20 per cent affordable housing sought [by policy].
“However, a substantial positive social impact will arise through the provision of housing, including four one-bed affordable housing units, in meeting identified needs for both market and affordable housing.
“Financial obligations identified to mitigate adverse impacts arising from the proposed development cannot be met in full. However, [policy] acknowledges that in such circumstances contributions may be prioritised on the basis of the individual circumstances of each case.”
Speaking at the meeting, agent Gethin Beynon said the project had a “significant economic value” of around £10m, and the local applicant had “a sense of stewardship to the local community,” offering affordable housing and community infrastructure towards highways and education.
Approval was delegated to the council’s head of planning to approve the application, subject to the completion of a Section 106 planning obligation, making community financial contributions.
The Section 106 agreement was recently agreed, with the application now formally approved.
Business
World of engineering and welding SPARCs interest in Ysgol Harri Tudur’s female learners
AN EVENT hosted by Ledwood Engineering gave girls from Year 8 and 9 at Ysgol Harri Tudur first-hand experience of the world of engineering recently.
Engineering is a booming sector in Pembrokeshire with a high demand for skilled workers in exciting career pathways associated with the development of low carbon and renewable energy industry and the Celtic Freeport.
The young women heard from industry experts on the importance of engineering in Pembrokeshire, and had hands on experience using a welding simulator, at the company’s Pembroke Dock site.
The learners are part of the County’s SPARC (Sustainable Power and Renewable Construction) initiative aimed as inspiring and empowering young females to consider careers in science, technology, engineering and mathematics (STEM) pathways where females are under-represented in the workforce.
SPARC is funded through an alliance comprising Blue Gem Wind, Ledwood Engineering, Port of Milford Haven, RWE Renewables, Pembrokeshire County Council, Pembrokeshire College and the Swansea Bay City Deal.
Mrs Laura Buckingham, SPARC practitioner at Ysgol Harri Tudur said: “Our learners had a fantastic experience at Ledwood Engineering. They were given lots of advice by industry experts on the different career options and pathways within the engineering sector.
“They appreciated the opportunity to ask their questions and found the session very informative. Having the chance to trial their welding skills on the simulator was an experience they continue to talk about and has definitely piqued their interest.”
Poppy Sawyer, Year 8 SPARC learner added: ‘It was a really good trip. Talking to the different people there has helped me know more about the jobs we could get which will be very useful when making choices for my future.”
“They helped us a lot by giving us lots of information. We were able to look around and try welding. It was really fun,” added Tianna Marshall, Year 8 SPARC learner.
The Regional Learning and Skills Partnership also launched its Explore Engineering interactive website at the event.
Business
Pembrokeshire care home group hit by £150,000 budget blow
A COMPANY with six care homes in Pembrokeshire has revealed it is facing a £150,000 financial hit due to controversial Budget measures.
The hikes in National Insurance contributions, combined with an increase in the Real Living Wage, are set to cause “12 months of instability,” according to Mike Davies, managing director of Sunset West Care Homes’ holding company, Dale Roads Group Ltd.
The group operates six care homes, including Langton Hall Residential Home in Fishguard, Pen-Coed Residential Home in Saundersfoot, and Woodfield Nursing Residential Home in Narberth. Other homes in the group are Woodland Lodge Residential Home in Tenby, Torestin Care Home in Tiers Cross near Haverfordwest, and Pembroke Haven in Pembroke Dock.
Mr Davies warned that struggling care homes may need to ask families to help cover the cost of care for their loved ones.
He is supporting a new campaign launched by Care Forum Wales (CFW), which calls for social care to receive an NHS-style exemption from National Insurance increases or emergency financial support to prevent care homes and domiciliary care providers from going bust.
Save Social Care campaign
CFW chair Mario Kreft MBE is leading the Save Social Care, Save the NHS campaign, highlighting the issue in letters to Welsh MPs, Senedd members, First Minister Eluned Morgan, and Health Minister Jeremy Miles. Similar letters have also been sent to Prime Minister Keir Starmer and Chancellor Rachel Reeves.
The campaign, supported by the Five Nations Group, warns that third-sector providers, including charities and hospices, face serious risks due to the Budget measures.
Mr Davies shared these concerns, stating that Sunset West Care Homes is looking at an additional bill of more than £130,000 just to cover National Insurance increases. Additionally, the group expects to incur an extra £18,000 annually to cover Statutory Sick Pay costs.
With 169 registered beds across the group, Mr Davies said further financial strain from wage increases could push care homes to the brink unless additional funding is provided by the Welsh and UK governments.
He said: “Operating during Covid stretched staff resources to their limits. Now, with these additional Budget costs, we are facing a snapshot of the challenges ahead.
“If costs remain as projected, we anticipate an extra £130,000 for National Insurance contributions alone. This doesn’t even account for the wage increases yet.”
“Uncharted territory”
Mr Davies warned that the social care sector in Pembrokeshire could face instability, with smaller operators struggling to survive.
He said: “We’ve already seen care home closures, and the likelihood is that smaller operators will find it even more difficult going forward. We are relying on additional funding to meet these new costs.
“Eighty per cent of our occupancy in the county comes from local authority placements. If there’s a shortfall, families might need to provide additional voluntary contributions.”
National funding crisis
CFW has calculated that the care sector in Wales faces a £150 million funding gap due to Budget measures, including a 1.2% rise in employer National Insurance contributions, a cut to the Secondary Threshold to £5,000, and a 5% increase in the Real Living Wage to £12.60.
Mario Kreft MBE said: “It represents a 37% increase in employer NIC for a member of staff earning £25,000 a year. This is effectively a tax on publicly funded care and on working people, which will ultimately impact families.”
Mr Davies echoed these concerns, adding: “We’ve discussed funding issues with local authorities, but they don’t have the money either. It’s going to have to come from the Welsh Government and Westminster.”
Pictured: Sunset West Care Homes group managing director Mike Davies says Budget measures will hit care homes hard (Pic: Sunset/Herald)
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