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Inflationary pressures and labour shortages remain important, but we're moving to a less volatile economic environment, with potential reductions in the interest rate, so if people have delayed investment decisions, now might be the time to reconsider.
Head of Mid-Corporate for North Wales, Barclays Corporate Banking
Businesses can benefit from helping Wales transition away from fossil fuels.
A series of funding and tax break initiatives should boost the Welsh economy.
We’re both convinced that the transition to renewable energy will be key to economic growth in Wales in 2024 and for years beyond that. We’re well placed to develop more wind and solar power but also to make the most of our coastline, particularly through the new plans announced for the Swansea tidal lagoon scheme, called Blue Eden. The Welsh government’s goal of meeting 100% of the country’s electricity needs from renewable energy by 2035 will help to drive that transition and create lots of new business opportunities.
There’s no doubt the transition will be a major challenge: fossil fuels currently account for a significant slice of Welsh exports – 21.8% the latest figures show1, with petroleum and related products and materials accounting for £4.5 billion. Individual businesses can of course play a part in the transition by adopting more sustainable practices and switching to renewable power as part of their environmental, social and corporate governance (ESG) strategies. We have the ESG expertise and lending solutions to help with this.
Looking ahead, there are many other opportunities for Welsh businesses, such as the first of the country’s two new freeports, covering Milford Haven and Port Talbot, launching in 2024. Another of these special economic zones has been announced and will include the Port of Holyhead, one of the biggest ‘roll-on roll-off’ ports in the UK. We expect to see growth in the hospitality and leisure sector – particularly where businesses combine our world-famous beautiful countryside with specialist adventure activities – and the country’s manufacturing industry, with sub-sectors including automotive, electronics, food and drink, will continue to thrive.
There are also opportunities in 2024 in the food processing sector to reduce ‘field to fork’ carbon emissions, and we anticipate continued growth in the Welsh tech sector, now one of the largest outside London. Around 10% of the total UK aerospace employment is based in Wales2 so it’s great news that space research, manufacturing and testing facilities in the country will get £8m from the Space Clusters Infrastructure Fund. More good news has been announced in the shape of new Investment Zones covering Cardiff and Newport, with each getting £160m of support aimed at boosting innovation and jobs.
Innovation is a key driver of economic growth, and our Eagle Lab in Cardiff is designed to support high-growth start-ups and entrepreneurs, offering investor connectivity events and business mentoring.
Head of Mid-Corporate for South Wales, Barclays Corporate Banking
A consistent theme that we’ve been hearing from clients when we talk about what will matter to them in 2024 is the continuing shortage of skilled employees. Hospitality and Leisure, which is particularly important to the Welsh economy because of the value of tourism, and healthcare will be the sectors worst hit once again by having to manage the challenge of transient workforces. At the same time, a more general ‘brain drain’ could see more of our best talent attracted to opportunities outside Wales.
Finding ways to attract and retain staff will of course be key to economic prosperity in Wales. April’s rise in the minimum wage will obviously benefit staff in some sectors but increase the cost base for employers. The answer to staffing issues for businesses could lie in increased focus on employee wellbeing, training, career progression and benefits. Existing employees and job candidates, particularly the younger generation, are also more likely to want to work for a business that clearly demonstrates a commitment to diversity and inclusion in the workforce.
Given the potential for tidal, wind and solar power in Wales, switched-on businesses may find opportunities in helping the country achieve ‘green’ ambitions like meeting 100% of its electricity needs from renewable energy by 2035.3
If your business is trying to figure out how to fund its ESG strategy, talk to us: we’re committed to doing all we can to provide Welsh businesses with the funding and advice they need to meet this and other challenges.
The Celtic freeport, covering Milford Haven and Port Talbot, launches in 2024 and a second Anglesey freeport is on the horizon too, so it’s worth thinking about how your business can benefit from these special economic zones and the tax breaks they offer.
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.
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