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Welsh output nears stabilisation as contraction in new business slows

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THE HEADLINE NatWest Wales PMI Business Activity Index – a seasonally adjusted index that measures the month-on-month change in the combined output of the region’s manufacturing and service sectors – rose from 48.0 in December to 49.9 in January, to signal broadly unchanged output levels at Welsh businesses at the start of 2024.

The broad stabilisation in activity followed four successive monthly declines. Nonetheless, of the 12 monitored UK areas, only Wales and the North East posted a sub-50.0 reading. Where a decrease in activity was noted, Welsh companies linked this to further subdued demand conditions and a downturn in new orders.

Welsh private sector firms recorded an eighth successive monthly decline in new orders during January. Anecdotal evidence suggested the fall was due to subdued client demand and greater competition. That said, the rate of decline eased for the third month running to the slowest since last September.

The marginal drop in new orders contrasted with the UK trend which signalled a modest expansion.

Firms in Wales indicated strongly upbeat expectations regarding the outlook for output over the coming year in January. Greater optimism was attributed to planned investment in capacity expansion, new product launches and hopes of a pick-up in customer demand.

Although higher than the series average, the level of positive sentiment dipped from that seen in December and was lower than the UK trend.

Workforce numbers at Welsh firms dropped for the sixth month running in January, with companies cutting staffing levels at a steep pace. Although the slowest for three months, the rate of job shedding was sharper than the series average and contrasted with the UK trend. Moreover, the pace of decline was the quickest of the 12 monitored UK areas.

Lower employment was linked to the non-replacement of voluntary leavers and efforts to cut costs.

Welsh firms recorded a further drop in backlogs of work during January, thereby extending the current sequence of decline seen since May 2022. Panellists often noted that subdued demand conditions led to the sustained decrease in incomplete business.

Although the pace of contraction slowed to the weakest since April 2023, it was sharper than the UK average.

January data signalled a continued increase in input prices faced by Welsh firms. Manufacturers and service providers alike recorded an uptick in cost burdens, as the overall rate of inflation quickened to the fastest since May 2023. Higher input prices were linked to greater wage bills, alongside increased supplier and transportation costs.

Despite accelerating, the pace of increase was slower than both the UK and historic series averages.

Welsh businesses registered a further solid rise in selling prices at the start of the year. The pace of inflation was little changed from that seen in December and slightly quicker than the long-run series average. The uptick in output prices reportedly stemmed from the pass-through of greater costs to customers.

The rate of increase was among the slowest of the 12 monitored UK areas, however, and faster than only Northern Ireland, the North West and Yorkshire & Humber.

Jessica Shipman, Chair, NatWest Cymru Regional Board, commented: “The start of 2024 signalled more positive trends emerging from the Welsh private sector, as activity was broadly stable on the month and the contraction in new business slowed to only a marginal rate. Firms also remained strongly upbeat in their expectations for the year ahead, and future expansion in output.

“Nonetheless, businesses cut workforce numbers steeply as pressure on capacity dwindled further. Job shedding in Wales was the fastest of the 12 monitored UK areas, with firms looking to rein in costs and have a tighter control on spending.

“Although cost burdens rose at a marked and accelerated pace, the rate of inflation was below both the historic series and UK averages. Moreover, in a bid to secure new sales, companies raised selling prices at only a solid rate that was among the weakest across the UK and much slower than that seen over 2023 as a whole.”

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Business

Johnston holiday lodges expected to be approved

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PLANS for 20 self-catering holiday lodges in the Pembrokeshire village of Johnston are expected to get the go-ahead next week.

An application before the May 21 meeting of Pembrokeshire County Council’s planning committee by Peter Rawsthorne seeks permission for the short-stay lodges and associated works on land behind The Larder, Vine Road.

The application, sited near a collection of single storey buildings associated with Silverdale lodge which are currently in use as temporary emergency accommodation, is recommended for delegated conditional approval.

A report for planners says: “The application seeks full planning permission for the siting of 20 short-term stay holiday lodges.  The lodges would be positioned on concrete bases either side of a central access road running through the length of the site.

“Comprising of either two or three bedrooms, each unit would have the benefit of an associated car parking space and raised veranda to provide access into the unit and an external amenity area.  The lodges will be finished with timber or timber effect cladding to the walls under a shallow dual pitched roof of metal sheeting with a UPVC framed fenestration and rainwater goods.”

It adds: “The proposal will generate some noise, odours and artificial light nuisance in comparison to a currently vacant site.

“Given the close proximity, at the southern end of the application site, to existing residential in Silverdale Close and Acorn Drive the Head of Housing and Public Protection has advised that a Noise Impact Assessment (NIA) should be required prior to the determination of the application to allow for the assessment of all noise emissions from the proposed development and for this to set out proposed measures of how to attenuate any noise nuisance.

“Consideration has been given to whether requiring such an assessment would be reasonable or necessary to make the development acceptable.

“It is acknowledged that the nature of the use of the site as proposed could generate some noise and disturbance, and that there is likely to be a heightened awareness to this for existing occupiers when the site is first occupied, compared to the current vacant use of the site or its previous use as an informal garden space for occupiers of the Silverdale lodges.

“However, the residential occupation of the space, albeit by short-term visitors who may have less regard for existing permanent residents, is a use typical of and expected in this service centre sized settlement and could be satisfactorily absorbed.

“Excessive noise and anti-social behaviour are matters which can also be dealt with by other legislative controls.”

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Business

Tafarn Sinc community pub’s call to keep disabled access granted

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A PEMBROKESHIRE community pub, which earned the support of a Hollywood star, has been allowed to keep a disabled access walkway and restored platform used for performances by local choirs.

In a retrospective application submitted to Pembrokeshire Coast National Park, Cymdeithas Tafarn Sinc sought permission to retain works at the Tafarn Sinc community pub in Rosebush.

In its submission, the community group said: “An existing platform adjacent to the pub has been restored and slightly expanded; with a new access walkway installed.

“The walkway was added for Health and Safety reasons and allows both able bodied and disabled people to safely access the platform. The platform is used for a variety of activities, such as performances by local choirs.

“The platform was formerly railway platform on a small branch line, and has been restored to look as it did when it was operational.”

The works were undertaken in 2022, the application said.

Tafarn Sinc had been in danger of closing when the old landlord and landlady retired back in 2017 but a huge fund-raising effort that attracted worldwide interest – including support from Hollywood star Rhys Ifans – meant it is now owned and run by the local community.

Campaigners raised a staggering £325,000 in little more than three months to buy the pub and keep it open and at the heart of community life.

Other public figures like Huw Edwards, Jamie Owen, Dewi Pws, Dafydd Hywel and ‘Heno’ presenter Mari Grug gave their support, with £200 shares bought by people from all over the world.

An officer report for the scheme proposed said: “The pub itself is constructed from corrugated metal and has an historical, industrial appearance. Historically, Rosebush Railway Station was adjacent and to the west of the pub building, built as part of the same development in the latter 19th century.

“A section of the Maenclochog Railway and platform still exist and form part of the pub and village’s visitor attraction. An inaccessible platform mock-up of a family of passengers had existed prior to this current development.”

Recommending approval it said: “The scale of proposal is proportionate to the existing ‘railway’ features and will create little impact on the special qualities of the National Park.

“There is concern however that the proposal could create an amenity impact for which this proposal has not been assessed for. An appropriate condition restricting the use of the development to prevent harmful noise pollution is therefore included.”

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Business

Council set to lease Haverfordwest airport in bid for financial stability

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SENIOR Pembrokeshire councillors are next week being recommended to lease Haverfordwest airport as part of plans to make the council-run facility, which had a circa £119,000 deficit last  year, cost-neutral to the authority.

Last year, Pembrokeshire County Council’s Cabinet, members heard the financial position at the council-supported Haverfordwest/Withybush airport deteriorated in 2022/23, with an out-turn position for 2022/23 of £238,000.

In March of this year, Pembrokeshire County Council’s services overview and scrutiny committee backed a recommendation that a lease to an existing stakeholder / established aviation company was pursued, including a wider stakeholder consultation.

A report before members at that meeting said the £238,000 loss had been reduced to an expected £119,000 for 2023/24 “following an extensive review of the operations of the airport”.

The report listed reasons for the halving of this deficit, including: an increased profit margin on fuel £40,000; increased landing fees £7,000; reduction in staff training £8,000; reduction in equipment and equipment maintenance costs £10,000; and a reduction in one off costs of hedges and sewers £53,000.

Following the scrutiny meeting, a more detailed recommendation is to be presented to Cabinet on May 20, and, if approved, would be dealt with under the delegated authority of the Assistant Chief Executive, with relevant input from officers.

The report before Cabinet says, following discussions with existing stakeholders: “It seems likely that the council would be able to agree a lease of the airport to an experienced and well-established aviation company who is an existing stakeholder with a good track record.”

The lease would be for an initial 10-year term, with a requirement to obtain/keep a CAA [Civil Aviation Authority] Cat II licence and at a market rent.

It adds: “This option would make the airport cost-neutral to the council from the day the lease is signed whilst also ensuring that an operational airport remains for Pembrokeshire to benefit from.

“The council intends to exclude Hangar 5 [indoor trampolines] from any lease as it is not part of the operational area of the airport and doesn’t house an aviation-linked business. This enables the council to keep the rental income from this property.

“The council also intends to include an option to take back, at no cost, part of the airport that may have the potential to be developed as a solar farm or industrial units.  Any staff currently employed at the airport would transfer to any new tenant/operator.

“Any lease would have to allow the operator to run the airport on the commercial terms of their choosing to give a chance of long-term sustainability, so, the council will lose full control of how the airport operates.

“However, any lease will require that the airport be maintained to an acceptable standard and that a CAA Cat II licence is maintained. If these terms of the agreement are breached, then the facility will return to the council.”

The report finishes: “It should be of note that an alternative proposal has recently been put forward by another existing stakeholder who does not have aviation experience.

“The proposal is one of a land swap whereby the council would exchange the airport land for other land owned by the stakeholder concerned. If this option were to be taken, the council would relinquish all its interest and any element of control it has in the airport, and accordingly there is no guarantee that an operational airport would remain in the county.”

It is recommended the former proposal is adopted; that the airport is leased to an existing stakeholder and established aviation company.

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