Business confidence in London fell nine points during April to 43%, according to the latest Business Barometer from Lloyds Bank Commercial Banking.
Companies in London reported lower confidence in their own business prospects month-on-month, down 12 points at 45%. When taken alongside their optimism in the economy, down six points to 41%, this gives a headline confidence reading of 43% (vs. 52% in March).
London businesses identified their top target areas for growth in the next six months as evolving their offering with new products and services (44%), introducing new technology (40%) and investing in their team, including new hires and investing in training (29%).
A net balance of 40% of businesses in the region also expect to increase staff levels over the next year, up nine points on last month.
The Business Barometer, which surveys 1,200 businesses monthly, provides early signals about UK economic trends both regionally and nationwide.
National picture
Overall UK business confidence held steady at 42% in April, the same level as recorded in March and February.
While firms’ confidence in their own prospects dipped marginally by four points to 45%, their confidence in the economy rose by four points to 39%. Meanwhile, the net balance of companies planning to increase staff levels over the coming 12 months climbed six points to 33%.
The East of England was the most confident UK nation or region in April (56%), followed by the Wales (51%) and the North East (46%).
Sector insights
Businesses in the manufacturing sector reported increased confidence this month, recording an increased score of 45% (up 4 points) which is the highest level for 3 months. Similarly, confidence among firms in the services sector (42%) and construction (41%) also improved, largely driven by greater economic optimism.
In retail, confidence pulled back slightly from last month’s strong showing to 40%, illustrating that confidence in this sector remains fragile. Retail is also more liable to be impacted by external factors sectors other sectors do not face into, such as the poor weather.
Paul Evans, regional director for London at Lloyds Bank Commercial Banking, said, “Despite a dip in confidence this month, it’s encouraging to see businesses in the capital looking to take positive action by investing in staffing levels in the next 12 months. This signals a longer-term confident outlook, and firms’ determination to put themselves in the best possible position to capitalise on new opportunities for growth when they arise.
Hann-Ju Ho, Senior Economist, Lloyds Bank Commercial Banking, added, “London businesses are still facing a fair amount of economic uncertainty, but as we head into springtime, they should expect a seasonal boom in hospitality and tourism. We’ll be by the side of businesses in the region to manage their cashflow and working capital in preparation.”
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