Confidence in growth prospects dip
London business leader’s confidence in the capital’s economic growth prospects has dipped, with a 16 point decline in the balance figure for firms expecting the London economy to grow in comparison to the previous quarter. This is according to new research from London Chamber of Commerce and Industry (LCCI).
The Capital 500 survey of London’s business leaders, conducted by ComRes for LCCI in August and September, found that although businesses’ cashflow positions had improved and that firms were generally upbeat about their own prospects, dips in confidence levels and a continuing struggle to recruit may indicate an underlying concern about the state of the UK and world economies.
Businesses also reported continuing struggles to recruit, including for skilled and managerial staff. Although there was a five point decline in the proportion of businesses saying that they had looked to hire staff in the last three months, half of those who did look to hire confirmed that they struggled to find the staff they needed. This is now an entrenched issue, evident across the last three quarters.
It was also telling that almost a quarter of firms said that pressure to increase wages had increased in the past three months.
Commenting on the figures, LCCI chief executive, Colin Stanbridge (below) said: ”While many indicators remain in positive territory, it appears we may be seeing a correction of a post-election bounce in confidence figures. With concerns growing over the health of the global economy, coupled with an uncertain period ahead for London as we look towards the election of a new Mayor in May next year, London businesses need certainty from Government.
”We would not want to see any rise in interest rates until well into 2016, to give businesses greater certainty around borrowing costs.”
”We would not want to see any rise in interest rates until well into 2016, to give businesses greater certainty around borrowing costs – a quarter of firms told us they were more concerned about interest rates that they were last quarter. We are also calling on government not to impose any further restrictions on employing non-EEA migrants, so that firms can fill the ongoing skills gap without additional red tape and rising costs.
”We would also renew our call to government not to leave London out of the race for UK devolution – a fiscal devolution pilot in London would give the capital the financial freedoms it needs to plan for London’s growth and secure investment in the key infrastructure projects that would future-proof our capital.’’
Colin Stanbridge, LCCI Chief Executive