Mark Mansfield
Welsh businesses recorded their first increase in new orders for eight months in September, but continued to cut jobs as cost pressures intensified.
The latest NatWest Wales Growth Tracker found that business activity grew at its fastest pace since May 2025, although the increase remained slight and below the UK average.
Its business activity index, which measures monthly changes in manufacturing and services output, rose from 50.4 in August to 50.6 in September. A reading above 50 indicates growth, while anything below that level signals a decline.
New orders increased for the first time since January, ending seven consecutive months of falling sales. Businesses attributed the improvement to winning new customers and greater interest from existing clients.
Confidence about the year ahead also reached its highest level since January.
Welsh firms recorded the largest monthly improvement in optimism among the 12 UK nations and regions covered by the survey.
Companies said they hoped new products and greater economic certainty would support growth over the next year.
However, the improvement in demand did not halt job losses. Businesses continued to reduce their workforces, citing relatively weak orders and efforts to cut costs.
The pace of job cuts eased to its slowest this year, but remained faster than the UK average.
Jessica Shipman, chair of the NatWest Cymru Board, said: “A renewed improvement in demand conditions spurred a stronger expansion in output and a notable uptick in business confidence for the year ahead in September.
“Although only slight, growth in new orders was the first seen since January, and helped support the strongest quarterly performance in the Welsh private sector in 2026 so far.”
She added: “Greater demand was insufficient to pull firms out of retrenchment mode, however, as employment fell at a solid pace amid further signs of spare capacity.”
Businesses also faced a faster rise in operating costs, with respondents pointing to higher fuel, material and wage bills.
Cost inflation reached its highest level in three months, although it remained the slowest among the 12 UK areas surveyed.
Despite those pressures, firms raised their selling prices at the weakest rate since February. Some reported offering discounts to retain customers and attract new business.
Ms Shipman said: “In fact, companies chose to prioritise new sales over margin protection, as selling prices increased at the weakest rate since February.”
The survey was compiled by S&P Global from responses collected between 10 and 28 September from Welsh manufacturing and services businesses.
The post Welsh businesses see first rise in new orders for eight months appeared first on Nation.Cymru.