Economic Intelligence Wales looks back at “turbulent” financial year in annual report

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Welsh businesses showed resilience in the face of a difficult financial year, with a strong increase in exports and growing business confidence.

Economic Intelligence Wales has published its fifth Annual report, examining and analysing economic trends in the 2022/23 financial year.

This unique research collaboration between Bangor Business School, Cardiff Business School, the Office for National Statistics, the Enterprise Research Centre and the Development Bank of Wales, pools intelligence and data to produce informative and useful insights into the Welsh economy.

Key points contained in this year’s Annual report include:

  • The highest interest rates in 15 years saw an impact on household spending and consumer demand
  • An increase in the gap between business births and deaths in Wales in recent quarters, with Q1 showing 2,875 business births and 3,620 business deaths
  • An increase in the number of companies in Wales in the highest risk credit rating category, at 5.2% in June 2023 (an increase from around 4.8% in June 2022)
  • A growing number of registered company insolvencies in England and Wales, which recently hit their highest level in the last four years.

Despite difficult economic conditions, there remain positive trends identified among Welsh businesses, including:

  • An increase in business investment
  • A drop in the redundancy rate
  • A strong increase in the nominal value of Welsh exports, increasing by more than a quarter to £20.9 billion, throughout the year
  • An increase in employment
  • Increases in business confidence

The Annual report also highlights the importance of the Development Bank of Wales, which in 2022/23 invested more than £124 million and created or safeguarded nearly 3,500 jobs - bringing the overall impact of the Development Bank’s activities in Wales in the last five years to £1.2 billion.

Following its expansion with the addition of new partners in 2022/23, Economic Intelligence Wales is due to publish further reports on the impact of the Welsh Government’s Covid-19 financial interventions; R&D-intensive businesses; the availability of early-stage equity in Wales; and net-zero carbon policies and SME initiatives towards decarbonisation.

Vaughan Gething, Minister for Economy, said: “In these difficult times, businesses in Wales have shown resilience and determination. I’d like to thank Economic Intelligence Wales for the vital insights this report provides and urge businesses to get in touch with the Development Bank of Wales and the Welsh Government’s own agency, Business Wales, for support.”

Giles Thorley, Chief Executive of the Development Bank of Wales, said: “The last financial year was a turbulent one for businesses across Wales, but many have continued to show their entrepreneurial spirit and there are causes for cautious optimism throughout the Welsh business sphere. 

“This report provides very useful insights into how wider economic conditions have impacted on Welsh businesses and Welsh finance, and gives us at the Development Bank of Wales an improved understanding of the role we play within those areas, allowing us to make better-informed decisions about our products and how we work with businesses.”

Professor Max Munday, of Cardiff Business School and one of the authors of the report, said: “The Annual report reveals business concerns about the high levels of interest, and with the underlying rate of inflation not falling as fast as hoped at the beginning of the year. However it was encouraging to see some increase in overall business confidence and with labour markets in Wales still showing some resilience.”