1/3/2006

Accountancy professionals in Wales have expressed renewed confidence in the economy according to the latest ICAEW/ORANGE - UK Business Confidence Monitor.

The survey of over 1,000 chartered accountants working in business reports a UK confidence index of +4.4 this quarter. In Wales, the confidence index stands at +12.8, making Wales one of the most confident regions in the UK as a whole, behind only Scotland, London and the Northern region.

The results in the first quarter of 2006 are a boost to the Welsh economy and can possibly be attributed to an improvement in consumer spending and the strong housing market across Wales, along with further announcements from the Welsh Assembly Government of RSA investment to business in south Wales such as Days Healthcare and Steinhoff UK Upholstery Ltd, and the successful contracts won by companies such as EADS Defence Security Systems, which between them have safeguarded or created around 300 jobs.

Businesses in Wales are also expecting both turnover and profits to rise at a faster pace over the next twelve months when compared to the previous twelve months. This quarter, finance professionals in Wales forecast turnover growth of 7.6 per cent over the next 12 months and profits are expected to grow by 6.5 per cent. Both of these figures outperform the growth expectations in the UK as a whole.

Businesses in Wales also expect their profit margins to grow, as they predict that prices will rise by 1.8 per cent over the next twelve months, after reporting that they had increased their prices by 1.2 per cent over the last twelve months; while at the same time, input prices are forecast to rise at a slower pace in the coming year than they did in the past year (2.5 and 2.2 per cent respectively).


Finance professionals in Wales also expect that salary raises will remain at much the same rate in the coming twelve months as they were in the previous twelve months at 3.0 per cent.

David Lermon, Wales Business Manager of the Institute of Chartered Accountants in England & Wales, commented:

“These are encouraging results, which we hope can be repeated in forthcoming quarters, as the benefits promised from the WDA merger with the Welsh Assembly Government show through�.

Alastair MacLeod, Vice President Business Solutions, Orange UK said;

"It is very positive to see that Wales is one of the most confident regions in the UK about its economic prospects and the majority expect financial conditions to rise even faster over the next year. I believe 2006 will present challenging market conditions, however I am confident that British business will overcome these hurdles and succeed.�

The poll of Chartered Accountants – those closest to the financial heart of business – monitors key business factors including turnover, profits, orders, prices, and capital investment. Its aim is to provide a robust benchmarking tool for policymakers and businesses alike.