Difficulties in the real estate market and the financial sector are affecting the confidence of businesses in London in the third quarter of 2019, according to the Institute of Chartered Accountants in England and Wales ( ICAEW). The professional chartered accountancy body has released its quarterly ICAEW Business Confidence Monitor™ report for London, after talking to its members in the city to find out how confident they are about the performance of their businesses and the challenges they are facing.
Business confidence in London is at -16.6 in the third quarter of 2019 (Q3), below the UK average of -10.3. The weakness in confidence may partially stem from difficulties in the real estate market, while wider concerns over Brexit and the global economy are impacting London’s globally prominent financial sector, as well as some of the city’s internationally-traded business services.
Business confidence trend in London
Companies are also reporting growing concerns over demand factors; a higher proportion of companies are citing customer demand (38%) and competition in the marketplace (41%) as a bigger concern than a year ago. There are also pressing labour market issues, with the availability of both non-management and management skills increasing sources of difficulty for 22% and 18% of London companies, respectively, compared to 13% and 10% a year ago.
Harpreet Panesar, ICAEW Regional Director for London and the South East, said, “Businesses have told us that demand is an increasing problem for them. It’s an uncertain time politically and economically, so it could be that consumers and businesses are limiting their expenditure, which is affecting businesses negatively.
“We’ve also heard that businesses are finding it hard to recruit and hold on to the staff they need. Businesses can do more to attract skilled staff by ensuring that they are offering attractive options to employees, for example offering employees the chance to train a learn new skills and to progress in their careers.”