Confidence in London on the up before crisis
Confidence among businesses in London improved in the first quarter of 2020 but remained in negative territory, according to the latest ICAEW Business Confidence Monitor.
The quarterly Business Confidence Monitor (BCM) for London, published released before the Covid-19 crisis took hold, found confidence was steadily rising in line with national sentiment but at -2.0 was still in the red.
Confidence was likely to have been affected by the concerns around the outcome of UK-EU trade talks in a region with a strong services sector, the report said. Companies were concerned about competition, but expected improvements in sales and profits over the coming year.
The BCM also found:
- Domestic sales growth slowed to 2.2% in the year to Q1 2020, compared to 2.6% a year ago. Exports growth stands at 2.3%, marginally down from on 2.5% in the year to Q1 2019.
- Businesses are limiting their increases in employment to just 0.6% in Q1 2020 year-on-year, which is the weakest rise in headcounts for London-based businesses since Q4 2012.
- Customer demand is a growing source of difficulty for 39% of businesses, compared to 31% in preceding 12 months. In addition, 47% of businesses cited regulatory requirements as a widespread challenge compared to 56% in previous year.
Harpreet Panesar, ICAEW Regional Director for London and the South East, said: “While business confidence in London remained negative, it was on an upward trajectory. The UK leaving the European Union in January likely ended some uncertainty, but ongoing negotiations with Brussels will have had a continued impact.”
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