Business confidence in London rose 20 points during April to 32%, its highest level since January 2020, according to the latest Business Barometer from Lloyds Bank Commercial Banking.
Companies in the capital reported higher confidence in their own business prospects month-on-month, up 17 points at 31%. When taken alongside their optimism in the economy, up 22 points to 33%, this gives a headline confidence reading of 32%.
The Business Barometer questions 1,200 businesses monthly and provides early signals about UK economic trends both regionally and nationwide.
When it comes to jobs, a net balance of 11% of businesses across London expect to increase staff levels over the next year, up two points on last month.
Overall UK business confidence surged 14 points in April to 29%, the highest reading since September 2018. The result follows the reopening of outdoor hospitality venues and non-essential retail and personal services providers in England and comes ahead of further lockdown restrictions easing in Wales and Scotland. Firms’ confidence in their own business prospects rose by 14 points to 26%, and their optimism in the economy increased by 15 points to 32%.
Most UK regions and nations reported a month-on-month increase in confidence during April, with firms in the South West (up 22 points to 30%), the East Midlands (up 20 points to 40%), Yorkshire and the Humber (up 20 points to 32%), and London reporting the largest surges. No nation or region reported a fall in confidence, and nowhere had a net-negative confidence reading for the first time since July 2019.
Mark Amis, regional director for London at Lloyds Bank Commercial Banking, said: “It’s clear that the ongoing easing of lockdown restrictions is having a huge impact on the outlook of London businesses – no doubt buoyed by the reopening of the city’s retail and hospitality sectors, in particular. With not all pubs and restaurants being able to offer outdoor seating, we may see a further surge in confidence when they can all welcome customers back inside from mid-May.
“In the months ahead, we will remain by the side of firms across the capital to help them recover from the disruption caused by the pandemic.”
Confidence increased in all sectors, with manufacturing and retail confidence levels at three-year highs. Manufacturing stood out as the most positive sector (40%), likely reflecting strong global demand and notwithstanding ongoing supply chain issues. Meanwhile, retail confidence jumped to 39%, while construction confidence also increased to 28%. Services confidence rose to 25%, which was also the highest it has been since 2018.
Hann-Ju Ho, Senior Economist, Lloyds Bank Commercial Banking, said: “A third consecutive monthly rise in business confidence alongside the highest level of confidence for two-and-a-half years tells us a positive story about the UK’s continued economic recovery and leaves us optimistic about the road ahead. While uncertainties remain regarding the evolution of the pandemic, this month’s improvement in sentiment reflects a further easing of COVID-19 restrictions, while progress in vaccine deployment is raising hopes that the negative impact of the health crisis will continue to fall in the months ahead as the economy reopens.”