London business confidence recovers

Businesses in the capital are now more optimistic than they were at the start of 2019, but risks remain in the economy, finds the latest ICAEW Business Confidence Monitor.

June 2019

The ICAEW Business Confidence Monitor has revealed that London has recovered the ground lost during the first three months of the year.

However, the results show that confidence in the capital is still in negative territory as business continues to struggle with an uncertain economic and political outlook.

At -13, London’s confidence now places it as the second most optimistic region in the UK, though trailing some distance behind the north region, which stands as the most optimistic at -2. Both regions are ahead of the UK’s average confidence rating of -16.6.

London’s recovery saw its confidence rating improve from the first quarter’s figure of -20.3, a reading that represented a sharp drop from 2018’s figures, which average -4.6 across the year. Key findings for Q2 2019 in the UK:

• Business confidence remains clearly negative but has not fallen significantly for the first time in 12 months;
• Slow and steady sales growth, with no major improvement expected in the year ahead
• Weak confidence and sales expectations, plus spare capacity, all contribute to fragile investment plans for business
• Employment is growing, but cautiously, with Construction facing the most skill shortages
• Transport and Storage (-26.7) and Property (-26.1) are the least confident sectors.

Speaking about the overall UK outlook, ICAEW chief executive Michael Izza said: “Businesses I speak to say that there is no sense that things will change much in the next few months and this is reflected in their confidence. Many have stockpiled ahead of the expected March exit from the European Union, but this did not happen.

“Stockpiling is expensive for businesses, but it did boost GDP growth. However, my fear is that this will have an impact on growth and GDP figures in the rest of the year, so we should not be surprised to see even lower growth than normal while companies use up the excess stock they now have.”

Read more at Business Conference Monitor

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