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Welsh business confidence soars despite February’s output decline

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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

Ferry Terminal ‘extremely busy’ due to ongoing Holyhead closure

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PEMBROKE DOCK Ferry Terminal has been experiencing significant congestion today as ferry services remain under immense pressure following the closure of Holyhead Port earlier this month.

The disruption, caused by storm damage, has rerouted ferry traffic through Pembrokeshire, leading to long queues and crowded facilities at the terminal.

The Herald can confirm that it has been very busy today with cars, lorries, and foot passengers queuing in large numbers. Staff are working tirelessly to manage the influx, directing vehicles and assisting passengers as they prepare to board the heavily booked ferries.

A spokesperson for the Port of Milford Haven said: “We are working closely with ferry operators and local authorities to ensure traffic flows as smoothly as possible, but the sheer volume of vehicles is causing unavoidable delays.”

Travelers are being urged to arrive early for their sailings and to remain patient as the terminal operates at full capacity.

Both Stena Line and Irish Ferries have increased capacity on their Pembrokeshire routes, deploying larger vessels, including the Stena Adventurer and the MV James Joyce, to handle the surge in demand.

From our position at the terminal, our photographer has captured photos showing long lines of vehicles, groups of foot passengers carrying luggage, and port staff coordinating efforts to ease congestion.

Authorities are advising non-essential travelers to consider rescheduling their journeys where possible and to monitor updates from ferry operators closely.

(Photos: Martin Cavaney/Herald)

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52 homes to be built in Roch as scheme gets final sign-off

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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.

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World of engineering and welding SPARCs interest in Ysgol Harri Tudur’s female learners

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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.

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