Business activity returns to growth in Wales

Daniel Bevan - Editor

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Welsh businesses returned to growth in July, ending a five-month period of contraction, according to the latest NatWest Cymru Growth Tracker.

The Wales Business Activity Index rose to 50.5 in July, up from 47.4 in June. The reading signalled a modest increase in output and the strongest pace of growth since June 2025, with firms pointing to early signs of recovering demand.

Business confidence also improved, reaching a three-month high, while the pace of workforce reductions eased to its slowest level so far this year.

Inflationary pressures softened during the month, with both input costs and selling price inflation easing to their lowest levels since February.

New orders fell for a sixth consecutive month, but the decline was marginal and the weakest recorded during the current downturn.

Jessica Shipman, Chair of the NatWest Cymru Board, said: “There were some encouraging signs for Welsh businesses in July. After a challenging first half of the year, activity returned to growth, demand showed signs of improving and business confidence moved higher.

“While it’s far too early to call this a full recovery, the data suggest businesses are starting the second half of the year on a firmer footing.

“The slowdown in new orders is easing, inflationary pressures have softened and firms are feeling more positive about the year ahead.

“There are still challenges to navigate, particularly around ongoing geopolitical uncertainty and elevated cost pressures, but July’s figures offer some cautious optimism that conditions could continue to improve as we move through the remainder of 2026.”