See the big picture
Despite recent economic challenges, we believe there are sound reasons for optimism among Welsh businesses in the year ahead. With expectations for greater alignment between the Welsh and UK governments and new funding announced in the recent Budget, we expect a more favourable investment environment.
Joint Heads of Mid Corporate, Wales, Barclays Corporate Banking
Although inflation and interest rates have stabilised, our conversations with clients suggest that higher costs and weak economic growth continue to put pressure on profit margins across the region. Wage inflation, impacted by the recent increases to employers’ national insurance and the minimum wage, are also likely to influence businesses’ ability to invest and grow.
However, despite these challenges, we believe there may be opportunities for Welsh businesses to take advantage of during 2025 and beyond.
Addressing the skills gap
We continue to hear from businesses that the skilled labour shortage is expected to intensify, particularly given the changing needs of many businesses across the region. For example, the proposed new electric furnace at Tata’s steelworks in Port Talbot1 is likely to require a different skillset to that required for the recently-closed blast furnaces.
In addition, several clients have mentioned that it can be particularly difficult to attract talent, while many family businesses are struggling to get the younger generations interested in being part of their succession plans.
On a more positive note, to overcome some of the challenges associated with the Welsh ‘brain drain’, we’ve seen various companies engaging more with their local communities, collaborating with local colleges, and even developing their own skills academies, to help encourage more people to join their industry and develop the skillsets needed for the future. We hope to see more businesses adopt innovative approaches to addressing the skills gap this year.
Accessing finance
Businesses in certain geographies such as mid-Wales have relatively poor connectivity and infrastructure, which can make it difficult to justify expansion and investment.
We want businesses to be aware of the finance options available – and we’re committed to supporting them with our range of lending solutions. In addition, businesses may want to consider alternative funding arrangements; for example, over the coming year and beyond, we expect to see more co-funding arrangements, with various finance providers with different risk profiles working together to help businesses reach the next stage of development.
As always, we’re here to help businesses across Wales access the finance they need, and we’re open to hybrid arrangements with other like-minded organisations.
Joint Heads of Mid Corporate, Wales, Barclays Corporate Banking
If you’re looking to unlock growth opportunities to move your business forward, our £22bn Business Prosperity Fund is available through some of our borrowing and refinancing options. See how we could work together to achieve your ambitions and strengthen the UK economy. Subject to normal lending assessment, status and application. Terms and conditions apply.
From working closely with colleges and communities, and adopting emerging technologies, to investing in renewable energy, businesses that are willing to embrace new ways of doing things may be more likely to overcome growth challenges.
To be ‘future ready’, businesses may need to adopt innovative approaches to seeking out the best talent and find creative ways to make the most of their locations and the natural resources at their disposal.
Making the most of external expertise from peers, professional advisers and your bank, and exploring all the options available, could be key to ensuring that your business has a credible plan that can deliver the finance it needs to succeed.
Keeping fraud front of mind
Fraudsters are as active as ever, impersonating our colleagues and attempting to defraud our clients. To help protect you and your business we have a wealth of resources available. You can view our quarterly fraud webinars and take a look at our other educational resources on our Fraud Protection Hub.
To discuss your business requirements and how Barclays can support you, contact us today.
