Welsh business activity grows at fastest pace in four years as job cuts deepen

Nation.Cymru staff

Business activity in Wales grew at its fastest pace in more than four years in October as firms took on more orders, according to the NatWest Cymru Growth Tracker.

While employment fell at the sharpest rate of the 12 UK areas covered by the survey, only the South East of England recorded faster growth in output.

Wales also recorded one of the strongest increases in new orders, behind only the South East and Yorkshire and the Humber.

The Wales Business Activity Index rose from 50.6 in September to 53.2 in October, signalling the strongest monthly expansion since June 2022. The seasonally adjusted index tracks changes in output across manufacturing and services. A reading above 50 indicates growth compared with the previous month, with higher readings pointing to a faster expansion.

New orders rose for the second month running and at the fastest rate since June 2025. Firms remained confident overall that output would rise over the coming year, although confidence slipped from September’s recent high.

Jessica Shipman, chair of the NatWest Cymru board, said: “Welsh businesses began the fourth quarter on a positive note, as activity and new orders expanded at much quicker rates amid stronger customer demand.”

The fall in employment accelerated from September. Companies told the survey they had enough capacity to handle incoming orders, and the amount of unfinished work continued to fall. Wales recorded the largest reduction in outstanding work among the 12 areas surveyed, even though the pace of decline at Welsh firms was the slowest since May.

“Previously weak demand and economic uncertainty have led to hesitancy among firms to expand employment despite more upbeat demand,” Ms Shipman said.

The cost of doing business also rose more quickly. The rate at which firms’ costs increased picked up for a third consecutive month and was the fastest since June. The rise was steeper than both the Welsh survey’s long-term average and the UK-wide trend.

Prices

Prices charged to customers continued to rise, but at the slowest pace since January. Of the 12 UK areas surveyed, only the East of England recorded a weaker increase in selling prices.

Ms Shipman said rising costs were putting pressure on firms’ finances, while some businesses were offering discounts to keep customers.

“At the same time, selling prices increased at the slowest pace since January as efforts to retain clients led to discounting,” she said.