Business hopes rise - South Wales Chamber of Commerce

Businesses across Wales are starting 2013 with new confidence after years of economic downturn, according to a survey of more than 500 firms.

The quarterly survey by South Wales Chamber of Commerce found 48% of small and medium-sized firms are expecting to boost profits over the next 12 months.

Chamber director Graham Morgan said the market remained difficult but business was "increasingly confident".

Firms said they expect to see growth in sales and investment plans this year.

The survey questioned a range of small, medium and large businesses on their trading experience over the final three months of 2012.

It found that more than three-quarters (76%) of those trading overseas saw sales remain steady or increase in that time.

These firms have the more optimistic outlook on sales, the survey found, but across all regions of Wales between 25%-33% of businesses are still seeing an upturn.

More than a third (35%) of small and medium-sized businesses from Newport, Swansea, Cardiff and mid Wales expect to maintain profitability while 48% expect to increase it.

Mr Morgan said the results were the in line with the view that the economy is still tough but the hope is that this will improve during 2013.

He said: "These figures support what we have been seeing on the ground in Wales, an increasingly confident business community, bolstered by improving sales figures over the last year."

The survey also found that the price of raw materials, energy, fuel and other overheads were the main pressures on business.

Mr Morgan added: "On top of this they now face an above-inflation rise to rail fares, and an increase to the Severn Bridge toll that will have an immediate impact on their employees."

He urged firms to take advantage of tax breaks to invest in the tools and infrastructure to "reach out to international markets".

But John Halle, managing director of a Welshpool-based manufacturing company employing 45 staff that makes wheel balance weights for automotive industry, said his firm was planning to grow but not to take on any more staff.

He said: "Most of our business is in Russia or South America. Personally, I can't complain but our general business which we have had for years is flat or definitely down.

"We will still be increasing our sales but against a market which is going negative for us.

"Things are not getting better. The car industry is selling fewer cars. There is less money being spent by people on buying tyres."

Michael Learmond, of the north Wales arm of the Federation of Small Businesses, said its own research showed that trading conditions are still tough for a lot of firms but many just want to "get on, grow their business and invest".

He said: "Firms are much more optimistic than they were at this time during the last two years.

"However, I am concerned that small business confidence in Wales is lower than the UK average. Giving Welsh small businesses the confidence to grow must become a priority."