Figures out today show that London’s businesses were buoyed by recovering domestic and export sales during the second quarter of the year in the capital, but recruitment challenges and fluctuations of costs continued to loom large.
The figures come from London Chamber of Commerce and Industry’s ‘Capital 500’ survey which is carried out on a quarterly basis, polling over 500 London businesses, making it the largest and most authoritative business survey in the capital.
As announced last week, the survey’s sales and exports indices are up, and all business confidence indicators also increased in this quarter, the first time this has happened for a year. Expectations for the wider economic outlook also improved, while still remaining gloomy overall.
However, with unemployment at its lowest levels since the 1970s, London’s recruitment market remained challenging during Q2 for businesses and workers:
- A quarter (23%) of London businesses trained up an existing staff member in order to acquire new skills.
- Four in five (82%) London businesses didn’t try to recruit during the second quarter of this year, despite the fact that 61% of all businesses are operating below full capacity.
- Of those businesses in the capital that tried to recruit during Q2, 79% of those were looking to fill full-time roles and 61% say they had difficulties.
- A quarter (23%) of London businesses say that pressure from employees to increase wages has increased in the last three months.
David Frost, Chief Executive of the London Chamber of Commerce and Industry said, “Most businesses looking to hire staff still face difficulties when doing so, with firms often concerned at certain skills deficits within London’s labour market. Around a quarter of businesses turned to investing in their existing staff during the second quarter of the year, in order to cover skills gaps. That is welcome but illustrates how tight London’s labour market is.
“After Brexit it will be important that the UK’s immigration policy is well-designed so that firms can continue to find well-trained and capable staff. We at LCCI have concerns about the proposed £30,000 salary threshold and welcome signals this may be reconsidered by the next government. It is also vital that our domestic skills system is working as effectively as possible.”
Completing the economic picture for Q2, the figures also showed business costs also proving a challenge to the capital’s businesses over the last three months:
- Nearly half (46%) of businesses reported increased fuel costs.
- 41% experienced increased costs for their business’s energy.
- 31% are seeing an increase in the cost of raw materials sourced domestically and 27% for those sourced internationally.
- One in five (21%) businesses say they are under pressure to raise prices due to raw material prices or finance costs.