Almost one third of small businesses in Wales have grown their workforce since the pandemic with nearly half predicting further growth in the next 12 months, new research suggests.

Economic Intelligence Wales has published a report looking at the effectiveness of the Welsh Government’s Economic Resilience Fund (ERF) given to SMEs during the Covid-19 pandemic.

It found that 30% of small Welsh firms said employee numbers had grown since the beginning of the pandemic, with 44% believing they will have more employees in the next 12 months. While 46% of businesses surveyed reported that they had developed new services or products in response to the Covid-19 pandemic, and around 43% revealed that they invested in staff development.

The report was jointly commissioned by Economic Intelligence Wales, Development Bank of Wales and Welsh Government examines data from phases 5 to 8 of the ERF – which delivered a total of £54m to Welsh firms. The report surveyed more than 1,600 businesses who received support from ERF3 to ERF7, offering insight into the health of Welsh SMEs post–pandemic and post-Brexit and amid inflationary pressures and the cost of living crisis.

Of those surveyed, 97% of businesses were still trading from February to May 2022. In addition, 89% said that the Welsh Government assistance they received worked well in combination with other government support.

Minister for Economy Vaughan Gething MS said: “The series of reports produced by Economic Intelligence Wales demonstrates the impact of Welsh Government support during and following the Covid-19 pandemic. Focused support provided through the Economic Resilience Fund helped secure jobs and protect businesses during difficult times.

I’m pleased to see businesses have not only gone on to employ more people since the pandemic, but many also believe they will see their employee numbers grow in the next 12 months. Despite continued economic setbacks following an unprecedented downturn, I’m glad to see the businesses we support have maintained cautious optimism and still see cause for growth despite difficult economic forecasts.”

Giles Thorley, chief executive of the Development Bank of Wales said: “The ongoing analysis of support provided by Welsh Government, and timely assessment of the health of those businesses supported during the pandemic, is hugely valuable at a time when many companies continue to face further economic uncertainty and difficult trading circumstances.”

The report identifies the obvious benefits of the Economic Resilience Fund, showing how targeted support from the Welsh Government had a strong, positive impact during such times – and we at the Development Bank of Wales will continue to work alongside all of our partners to back Welsh businesses.”

Max Munday from the Welsh economy research unit at Cardiff Business School said: “It has been encouraging to see the positive impacts of the Economic Resilience Fund on job creation and safeguarding, as well as on business resilience and survival.”

However, a difficult new set of economic conditions now faces Welsh businesses, which we will explore through the final wave of survey work and will report on later this year.”

The final report in this series will include analysis of a longitudinal survey of recipients of Welsh Government Covid-19 financial interventions, including a final wave of surveys which will be undertaken in the first half of 2023.

Business Wales has recently said it has supported more than 390,000 entrepreneurs and businesses since it launched ten years ago. It has also assisted the creation of over 19,000 new start-ups, directly contributing to almost 47,000 jobs in the Welsh economy and safeguarding around 16,000 jobs.