BUSINESS confidence has once again grown to the highest level since before the coronavirus pandemic - with Wales leading the way.

The Bank of Scotland’s latest business barometer measuring industry confidence has recorded its highest level of optimism since February 2020.

The survey of 1,200 UK companies compares the percentage of firms that are positive or negative in outlook to calculate the balance of opinion.

Wales reported the biggest month-on-month increase, increasing 18 percentage points to 27%.

Overall UK business confidence rose four points in May to 33%, a fourth consecutive month of growth.

Every country and region of the UK reported a net positive confidence reading in May, with almost all areas recording an increase in confidence.

Construction confidence was up seven points to 35%, and retail gained five points to a four-year high of 44% – with the easing of lockdown measures leading to hopes of stronger business conditions, although the wider services industry confidence posted a rise of just one point to 26%.

Paul Gordon, a managing director at Lloyds Bank Commercial Banking, said: “The UK’s regions and nations continue to report positive business confidence in recent months, which is a welcome change from where we were at this time last year.

“In the sectors, manufacturing continues to outperform, reflecting strong domestic demand, while retail once again reported stronger confidence as restrictions ease across the UK.”

Hann-Ju Ho, a senior economist for Lloyds Bank Commercial Banking, said: “A fourth consecutive monthly increase in business confidence, and the highest in three years, leaves us hopeful for the UK’s economic recovery.

“The increase in confidence was buoyed by a further easing of lockdown restrictions and a rise in optimism about the wider economy.

“While we need to wait and see how the months ahead will unfold, the recent rise in positive outlook is an encouraging sign that firms are emerging from the Covid-19 crisis with renewed resilience and vigour.”