Figures out this week from the Capital 500, London’s largest quarterly business survey, highlight the impact of the Covid-19 lockdown on the capital’s economy during the second quarter of 2020, with the challenge for the hospitality sector especially clear.
London Chamber of Commerce and Industry (LCCI) data shows that 65% of the 500 London businesses polled (by Savanta ComRes for LCCI regarding their Q2 2020 economic performance) reported reductions in their cashflow, as domestic and export revenue dried up.
The challenge was particularly acute for the hospitality sector – where 75% of firms reported a drop in cashflow.
A higher amount of hospitality businesses also reported a downturn in domestic sales (77%) and orders (73%) than any other sector of the London economy. For all businesses, 63% said domestic orders had declined from the previous quarter, while 66% said domestic sales were down.
Business confidence was also at its lowest amongst the hospitality sector, with 80% expecting economic conditions in London to worsen over the next year (67% amongst all business leaders), whilst 87% expect UK economic growth to worsen over the same time period (73% amongst all business leaders).
Richard Burge, Chief Executive of London Chamber of Commerce and Industry said, “With businesses forced to close their doors to stop the spread of Covid-19, it will surprise no-one to hear that the London economy largely took a swift and sizeable hit.
“The recovery will likely not be as swift. So, whilst business is grateful for the economic support package thus far, targeted sector intervention from the Government may well still be required later this year.
“The Q2 results particularly highlight Covid-19’s impact upon the capital’s renowned hospitality sector.”