The London Chamber of Commerce and Industry (LCCI) has called on the Government to go further with its growth agenda after it reported worsening conditions for the capital’s businesses.
Most of the key performance indicators for London’s businesses dropped in the third quarter of the year, according to LCCI’s quarterly economic survey (QES).
Sales and orders for companies in the capital fell significantly in the third quarter, the report found, with export markets being hit particularly badly. The balance for export sales fell by 22 points to reach minus seven per cent, while the balance for export orders also stands at minus seven per cent after it decreased by 15 points.
London’s businesses had benefited from growing export markets since the first quarter of 2009, but these figures suggest the eurozone crisis is hitting the capital.
Firms also reported a decline in their cashflow, with the balance falling by five points in the third quarter to stand at minus 15.
LCCI chief executive Colin Stanbridge said: “It is of course a major concern that London’s businesses saw such a significant worsening of conditions during Quarter 3 but now is not the time for doom and gloom. It is heartening to see that business confidence remains stable in what is currently a very unstable business environment, and that firms have resisted the urge to cut their investment budgets when faced with falling sales and orders and deteriorating cashflow.”
Business invested more in staff training in the third quarter, according to the research, while there was also more investment plans for equipment and plant. Despite the turbulent economic conditions, businesses remained positive about their own fortunes. Some 49 per cent of companies expect their prospects to improve over the next year, an increase of two points, while 53 per cent of companies believe their turnover will go up over the next 12 months.
Stanbridge said: “Ultimately, these figures should serve as a reminder to the Government that it needs to go even further with its growth agenda. When the chancellor delivers his Autumn Statement at the end of this month he needs to deliver a clear list of proposals for how he intends to ease conditions on firms. In particular, he needs to go beyond current government rhetoric on deregulation and set out exactly what major regulations the government plans to scrap during the current parliament.”
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