THE NUMBER of overdue invoices on the books of Welsh businesses reached a 21-month high in January, according to new research from R3, the UK’s insolvency and restructuring trade body.

R3’s analysis of data provided by Creditsafe shows that businesses in Wales had a total of 152,973 overdue invoices on their books last month. This was the highest number on record since April 2023’s figure of 153,837.

Overdue invoice numbers rose by 12.7% year-on-year from January 2024’s total of 135,773, and rose by 5.2% when compared to the previous month’s total of 145,366.

Bethan Evans, Chair of R3 in Wales, says: “The last couple of years have been incredibly challenging for Welsh businesses. While a decline in inflation levels in 2024 provided some relief by slowing the pace of rising costs, this was offset by a host of other mounting challenges.

“Ongoing supply chain disruptions throughout last year made it much harder for businesses to operate smoothly, while high and rising energy costs have continued to squeeze profit margins. These difficulties were further compounded by new pressures introduced in the Autumn Budget, with businesses now having to reassess their finances in the face of rising Employers’ National Insurance Contributions and an increase in the minimum wage.

“It’s clear from these statistics that many firms are now feeling the impact of these ongoing challenges, with businesses having to delay more and more payments.”

The total number of Welsh companies with overdue invoices on their books rose to 18,631 in January, the highest level since February 2023’s total of 18,648.

The number of companies with overdue invoices on their books rose by 6.4% year-on-year from January 2024’s total of 17,510.

Bethan, who is a partner at Menzies LLP continues: “Over the past couple of years, many businesses struggled to pay their bills on time, and as conditions have not improved enough, these debts have built up over time. This has placed immense pressure on Welsh businesses, with more and more now unable to meet their payment deadlines amidst ongoing financial challenges.

“If conditions don’t improve early this year, we could see more companies facing even greater pressures, with some turning to insolvency processes to address their financial issues.

“I would urge businesses in Wales to seek advice at the first signs of financial distress. Conversations around money can be extremely difficult, but by facing your problems early, you’ll have more time to think about your next steps and more potential options available to you for resolving your concerns.”

BUSINESS confidence in Wales increased by three points to 24% in February, according to the latest Business Barometer from Lloyds Bank.

While optimism in firms’ own trading prospects fell by three points to 31%, confidence in the broader economy climbed by ten points to 18%. Taken together, this resulted in a headline confidence reading of 24%, up from 21% in January.

A net balance of 20% of businesses in Wales also indicated plans to expand their workforce over the next year, marking a 15-point rise from the previous month.

Looking ahead to the next six months, Welsh businesses highlighted key areas for growth. These included diversifying their offerings by launching new products or services (42%), investing in staff training and development (36%), and incorporating new technology such as automation or artificial intelligence (34%).

UK confidence at six-month high

Across the UK, business confidence saw a significant increase of 12 points in February, reaching 49%—its highest level since August 2024.

Optimism in trading prospects rose by six points to 57%, while confidence in the wider economy surged by 18 points to 42%.

The North East emerged as the most confident region, recording 69%, followed by the North West and East of England, both at 61%.

Sector growth across the board

All four surveyed sectors reported double-digit increases in confidence. Manufacturing posted the largest improvement, rising by 13 points to 51%, while construction saw a 14-point increase to 50%. Retail confidence climbed by 11 points to 51%, and the services sector grew by 10 points to 48%.

Within the services sector, hospitality firms reported a particularly strong rebound, with sentiment reaching its highest level in several months. Confidence levels varied, with the services sector seeing its strongest position in four months, while manufacturing reached a seven-month high.

Expert insights

Dave Atkinson, regional director for Wales at Lloyds Bank, said: “It’s encouraging to see Welsh business confidence return to growth and more firms planning to hire—something that benefits both their operations and local communities.

“We’ll continue to support Welsh companies as they drive forward with their growth strategies and capitalise on new opportunities.”

Hann-Ju Ho, senior economist at Lloyds Commercial Banking, added: “The rise in business confidence demonstrates the resilience of UK businesses and their ability to navigate challenges such as rising costs and uncertainty.

“Increased optimism and improved trading prospects are encouraging businesses to invest in workforce growth and upskilling. This aligns with the expectations set at the beginning of the year, where 70% of businesses anticipated an increase in turnover for 2025.

“To maintain this positive momentum, businesses must continue to innovate and adapt, ensuring they remain competitive and resilient in the face of future challenges.”

An AWARD-winning Pembrokeshire restaurant/hotel whose buildings date back to the 18th century has been given permission for a three-storey extension by county planners.

In an application to Pembrokeshire County Council, Neil Kedward of Grove Hotel, Molleston, near Narberth sought permission for the extension, which includes staff facilities and additional bedrooms.

The Grade-II-listed boutique country house hotel/restaurant, isset in a 26-acre estate, with the main phases of the house from the 15th century, 18th and 19th (domestic Gothic by architect John Pollard Seddon) with sympathetic Arts and Crafts style extensions constructed in the 21st century.

The Grove has won many awards and recommendations; these include being listed in the 2024 Michelin Guide as an outstanding place to stay in Great Britain and gaining 13th spot in TripAdvisor’s ‘World’s Best Small and Boutique Hotel’ category in its ‘Best Places to Stay in the World for 2024’ awards.

A supporting statement accompanying the application for the extension, by agent Acanthus Holden Architects, said the earliest record of a house at The Grove dates to 1670, with the existing housing going back to the 1740s, extended in 1870-1874 by the architect John Pollard Seddon.

Ten years ago, the Grove was restored and opened as a luxury hotel, the statement says, adding: “A new west wing, sympathetic to Seddon’s design was built to accommodate a restaurant and additional bedrooms. The Coach House, Longhouse and Grove Cottages were also renovated as hotel suites.”

Detailing the extension, it says: “The extension has been designed so that it sits comfortably alongside the existing bedroom and restaurant extension, using the same materials for the wall and roof finishes, and a similar style of windows. However, the overall aesthetic of the new block has been designed to give a more stable block feel with the parapet walls and corbelling details to the gables which distinguishes it from the main hotel.”

An officer report recommending approval said: “The extension to the hotel would have positive social impacts through the offer of additional accommodation within the locality as well as improved facilities for the existing staff. There would be positive economic impacts through expenditure from guests as well as from labour and building materials in the construction phase.”

It adds: “The proposed extension is located on the southern (rear) elevation of the hotel and would appear as an enlargement of a recently constructed rear wing. The extension is of an acceptable form and scale and utilises careful arts and crafts inspiring detailing. The extension would not alter the principal North entrance front or the building setting within the site and surrounding area.”

The application was conditionally approved by planning officers.