Business confidence in London fell 12 points during September to 57%, according to the latest Business Barometer from Lloyds.
Companies in London reported lower confidence in their own business prospects month-on-month, down 22 points at 64%.
When taken alongside their optimism in the economy, down three points to 50%, this gives a headline confidence reading of 57% (vs. 69% in August) – the second highest of any UK nation or region in September, and above the UK average.
Looking ahead to the next six months, London businesses identified their top target areas for growth as introducing new technology (54%), investing in their team, for example through training (51%) and entering new markets (40%).
The Business Barometer, which surveys 1,200 businesses monthly and which has been running since 2002, provides early signals about UK economic trends both regionally and nationwide.
National picture
Overall, UK business confidence fell 12 points in September to 42%.
Firms’ confidence in their own trading prospects fell 12 points to 51%, and their optimism in the wider economy fell 11 points to 33%.
The North East was the most confident UK nation or region in September, climbing 13 points to 68%.
Sector Insights
Firms across manufacturing, construction, retail and services all saw confidence fall this month. The biggest change was in manufacturing with a decline of 31 points to 31%, a two-year low. Retail sentiment fell 17 points to 40%, its lowest level in four months. Similarly, confidence in the service sector fell six points to 47%, the lowest reading since April. Construction continued to decline for the fourth consecutive month, dropping 5 points to 35%.
Kirsty Sadler, regional director for London at Lloyds, said: “Despite this month’s results, London business confidence remains one of the strongest in the country and higher than the national average.
“The city’s businesses continue to seek on new areas for growth – a reflection of their ambition. As we enter the final quarter of the year, we’ll continue to work with them to support their strategies and capitalise on the opportunities ahead.”
Hann-Ju Ho, Senior Economist, Lloyds Commercial Banking, said: “While increased market volatility earlier in the month may have impacted confidence, levels of trading prospects and economic optimism remain above their long-term averages. Businesses may find reassurance that the Bank of England is expected to reduce interest rates further in the next six months, while long-term global bond yields have calmed which, if sustained, may have a positive impact on businesses as we move into the last few months of the year.”
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