Business confidence in London rose two points during March to 62%, according to the latest Business Barometer from Lloyds.
While companies in London reported lower confidence in their own business prospects month-on-month, down two points at 62%, their optimism in the economy rose six points to 62%.
Taken together, this gives a headline confidence reading of 62% (vs. 60% in February) – the joint-highest confidence of any UK nation or region in March, alongside the West Midlands (also 62%).
A net balance of 63% of businesses in the city also expect to increase staff levels over the next year, up seven points on last month.
Looking ahead to the next six months, London businesses identified their top target areas for growth as investing in their team, for example through training (61%), introducing new technology such as AI or automation (47%) and entering new markets (45%).
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. This data was gathered between the 3rd – 17th March, ahead of the Spring Statement.
National picture
Overall, UK business confidence was 49% in March – the same as in February.
While firms’ optimism in their own trading prospects held steady at 57%, their confidence in the wider economy dropped one point to 40%.
Sector Insights
Retail confidence rose seven points to 58%, a post-pandemic high, reflecting positive trading prospects.
In contrast, the manufacturing sector saw the largest decrease in business confidence this month, declining 12 points to 39%, due to increased concerns about supply chain disruptions. Construction firms also saw a decline to 48% and businesses in the service sector saw confidence decline to 47%.
Kirsty Sadler, regional director for London at Lloyds, said: “London’s business confidence continues to climb, with the capital’s outlook once again leading the country.
“Firms are setting out clear plans to invest – whether that’s new technology, training or new markets – and we’ll continue to provide our support to help translate these strategies into growth.”
Hann-Ju Ho, Senior Economist, Lloyds Commercial Banking, said: “Business confidence remained steady this month, suggesting that UK companies may have been waiting to see the impact of government decisions at home and globally. Despite this, today’s data continues to reflect a positive growth trend in the UK economy. With confidence maintaining last month’s high, business leaders are optimistic, noting that investing in their development and workforce will position them well to seize future growth opportunities.”
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