London business confidence improves for second consecutive month
Business confidence in London continued for the second consecutive month as the Eat Out to Help Out scheme provided a boost to the capital’s hospitality industry.
The Lloyds Business Barometer, which measures monthly economic trends, found confidence in the capital rose eight points but remains in negative territory, at minus 13 per cent, slightly higher than the national average.
Companies surveyed reported higher confidence in their own business prospects month-on-month at minus 13 per cent again. However, the pandemic continued to have an effect on London firms during August, with 66 per cent experiencing a drop in demand for products and services.
Just 11 per cent reported an uptick in demand, unchanged on July.
Of the 52 per cent of businesses reporting disruption to their supply chain this month, 39 per cent expected the situation to improve within six months, while 7 per cent expected it would take more than a year to return to normal levels.
There was some movement away from government support schemes, with almost a quarter of London firms saying they were not currently using the furlough scheme.
As feared, some businesses expect to make redundancies as the job retention scheme winds down in October. When asked about job retention among firms with furloughed staff, only 16 per cent expect to bring back more than 90 per cent of their staff.
Paul Evans, regional director for London at Lloyds Bank Commercial Banking, said: “It’s encouraging to see firms’ outlook improving for a second consecutive month, but there’s clearly still some way to go. The introduction of VAT cuts and the Eat Out to Help Out scheme will have provided a boost to the capital’s huge hospitality industry and contributed to the improved picture this month.”
“We remain by the side of businesses across all sectors in the capital to help them emerge from this pandemic in as strong a position as possible.”
Nationally, overall UK confidence edged up to minus 14 per cent for the month, with South East the first region to register a positive reading since March, at one per cent.
All four major industries reported confidence at their highest levels since the pandemic hit. Manufacturing jumped 14 per cent to minus 7 per cent, while construction rose 11 points to minus 11 per cent.
The retail sector rose to minus 8 per cent while services increased to minus 18 per cent, as the government’s Eat Out to Help Out scheme kicked in.