Business confidence in London rose 10 points during July to -21%, according to the latest Business Barometer from Lloyds Bank Commercial Banking.
Companies in the capital reported higher confidence in their business prospects month-on-month at -23%. When taken alongside their views of the economy overall, this gives a headline confidence reading of -21%.
The Business Barometer questions 1,200 businesses monthly and provides early signals about UK economic trends both regionally and nationwide.
When asked about the impact coronavirus was having on their business, the majority of firms continued to see demand negatively affected during July, but with the picture slightly improving month-on-month. 66% experienced a fall in demand for their products and services, down three points on the month before. Meanwhile, 11% experienced an increase in demand, up three points on June.
Some businesses expect to make redundancies following the reintroduction of National Insurance and pension payments for furloughed staff from August. When asked about job retention among firms with furloughed staff, only one in five (18%) expect to bring back more than 90% of their staff.
A quarter (25%) of London firms surveyed said they weren’t currently using the Job Retention Scheme.
When asked about social distancing measures, half (49%) of businesses said they could, in theory, operate at full capacity while remaining COVID-secure, although more than a quarter (28%) said they couldn’t operate fully within the rules.
Of the 59% of London businesses reporting disruption to their supply chain during July, 49% expected the situation to improve within 12 months, while 9% expected it would take more than a year to return to normal levels.
Paul Evans, regional director for London at Lloyds Bank Commercial Banking said, “The reopening of the hospitality and retail sectors will have contributed towards this month’s less pessimistic outlook, but a great deal of uncertainty and concern for the future remains across all sectors, tempering the overall mood.
“Whatever lies ahead, we remain by the side of businesses across the capital to help them emerge from this crisis in as strong a position as possible.”