Business confidence climbs in the capital – London Business News | Londonlovesbusiness.com

Business confidence in London rose 12 points during July to 55%, according to the latest Business Barometer from Lloyds Bank Commercial Banking.

Companies in London reported higher confidence in their own business prospects month-on-month, up 16 points at 72%. When taken alongside their optimism in the economy, up eight points to 38%, this gives a headline confidence reading of 55% (vs. 43% in June).

A net balance of 54% of businesses in the region also expect to increase staff levels over the next year, up 18 points on last month.

Looking ahead to the next six months, London businesses identified their top target areas for growth as entering new markets (45%), investing in their team, for example through training (43%), evolving their offering, for example by introducing new products and services (37%) and introducing new technology (37%).

The Business Barometer, which surveys 1,200 businesses monthly, provides early signals about UK economic trends both regionally and nationwide.

National picture

Overall UK business confidence climbed nine points in July to a net balance of 50% – the same as in May when confidence reached an eight-year high.

Businesses’ confidence in their own trading prospects rose 12 points to 56% – the highest reading since April 2017. Meanwhile, confidence in the economy climbed six points to 45%.

Wales and the East Midlands (both 62%) were the joint-most confident UK regions or nations in July, followed by the East of England (61%).

Sector Insights 

There was an improvement across all sector categories this month – most notably in retail which rose by 25 points to a post-pandemic high of 60%. There were also significant gains in manufacturing trading prospects, with the net balance increasing by 9 points to a two-year high. Services rose 10 points to 56%, while construction saw a more modest increase by 2 points to 44%

Kirsty Sadler, regional director for London at Lloyds Bank Commercial Banking, said: “July has brought sunnier days and an even sunnier outlook for businesses across the capital.

“It’s particularly encouraging to see firms so confident in their own prospects – a reflection of all the tireless work London businesses have invested in building strong offerings and capitalising on opportunities for growth. As the city’s businesses look ahead to their next steps, we’ll by their side with our funding and support.”

Hann-Ju Ho, Senior Economist, Lloyds Bank Commercial Banking, said: “This month shows that businesses are feeling more confident, buoyed by their positive trading prospects and economic outlook. Retail-focused businesses were the main driving force behind the positive rise in trading prospects and these results tally with the improvement we have seen in consumer confidence.

“With the data suggesting that businesses may have taken a more cautious approach in June, next month will be one to watch to see if the renewed sense of optimism continues.”