Responding to the latest ONS figures on GDP and trade for August 2022, Paul Slevin, Executive Chair of Chambers Wales South East, South West and Mid, said:

“Today’s UK GDP data compounds fears that the economy is heading towards recession as we battle the cost-of-living crisis and other significant challenges.

“Results from our recent quarterly economic survey show that more than half of Welsh businesses feel that a recession now will be more challenging than the impact of lockdown in 2020. 68% of Welsh businesses have already seen their sales stall or decrease in the past 3 months.

“The Welsh and UK Governments must do all they can to support our businesses by rapidly providing more detail on their fiscal policies and supply side reforms, particularly at a time when businesses face the twin crises of rising interest rates and high inflation.

“The six-month energy support package will have provided some breathing room, along with the Energy Bill Relief Scheme, but businesses need surety to provide them with the confidence to not only survive but thrive in this period ahead.

“In terms of trade, although the UK’s deficit in trade goods has widened, exports have increased, particularly to non-EU countries, with the private sector playing an important role in this, especially in the exporting of machinery.

“Awareness of free trade deals must be an area of focus, along with bringing companies into the fold on future trade negotiations. Decisive action needs to be taken to reduce some of the removable red tape costs for traders.

“Despite a period of immense challenges, many Welsh businesses remain optimistic, with 47% expecting turnover to increase over the next 12 months. They must hold on tight to this optimism and not underestimate the power of the private sector to reverse the downward trend we are facing.”