Confidence among Welsh SMEs dips but outlook remains positive, says new report
Confidence among Welsh SMEs dips but outlook remains positive, says new report
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Almost half of small businesses in Wales remain confident about the year ahead, despite rising costs and shifting consumer behaviour, according to a new report from global fintech company SumUp.
The survey of 750 UK small business owners and decision makers found that 47% of SMEs in Wales feel confident about the future of their business over the next 12 months, although this represents an eight-point drop from last year.
Confidence levels have shifted compared with 2024, when 44% of Welsh SMEs described themselves as “very confident.” This year, only 29% remain strongly optimistic, while a further 18% say they are confident but cautious, up from 11% last year. Meanwhile, 41% report a neutral or uncertain outlook, and just 12% say they are not confident about the future.
The research highlights significant challenges facing small firms. Rising costs were cited by 59% of Welsh SMEs as their biggest concern, with energy bills (41%) and wider economic pressures, such as inflation and interest rates (35%), also weighing heavily.
Changing consumer habits are also biting: 47% say customers are spending less, 30% report that purchasing decisions are taking longer, and nearly one in three (29%) find it harder to retain customers.
Other difficulties include skills shortages (29%) and competition from cheaper alternatives (24%).
Despite these pressures, most SMEs are taking action. Over four in five (82%) have made strategic changes in the past six months, from switching suppliers and renegotiating service contracts to adjusting pricing strategies.
Around a quarter of firms report success from lowering prices to match customer expectations, while the same proportion have increased prices to protect margins. Other businesses have introduced new products or services, invested in staff skills, or enhanced their digital presence.
Looking ahead, cutting costs and improving profitability are top priorities. The report shows that 59% of Welsh SMEs aim to reduce costs or debt, while 41% are focused on strengthening profit margins. Many are also diversifying income streams, with 24% exploring e-commerce or social media sales, and others planning new product launches or seeking investment.
Commenting on the findings, Corin Camenisch, Product Marketing Lead at SumUp, said: “As champions for small merchants, we conducted this survey to discover the confidence levels of small business owners and decision makers in the UK to better understand the challenges they face, gauge their optimism about their future, and identify areas where support for SMEs might be needed.
“Overall, confidence levels of small business owners and decision makers across the UK are high. This positive outlook suggests that small merchants are prepared to navigate potential uncertainties and continue to thrive.”
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