Business confidence increases in London during Q1 2021

Wednesday 31 March 2021

Having started the year at the lowest point since the financial crash in 2008, business confidence in London improved during the first quarter of 2021.

Whilst remaining at low levels, the proportion of business leaders saying that London’s economic prospects will improve over the coming year has risen to nearly a third (29%), compared to 20% during Q4 2020.

The proportion saying that London’s prospects will worsen has reduced from 60% to 45%.

Amidst vaccine rollout and publication of the lockdown easing roadmap, London Chamber of Commerce and Industry worked with Savanta ComRes to poll 500 London business leaders between February 4 and March 16 about their company’s performance, as part of LCCI’s ‘Capital 500’ quarterly survey.

Results also show a 10-percentage point increase compared to the previous quarter in the proportion of business leaders who said that UK economic prospects would improve over the coming year. Whilst remaining negative overall, confidence also increased amongst business leaders about their company’s ability to increase turnover and profits.

The challenging context in which businesses continue to operate is however brought home through the results, with at least two in five London business decision-makers surveyed saying their levels of cashflow (50%), business domestic orders (45%) and domestic sales (42%) have gone down over the past three months compared to the previous three months.

Whilst 36% of businesses who have export sales reported a decrease – a larger proportion than the 32% who said so during the previous quarter.

Richard Burge, Chief Executive of London Chamber of Commerce and Industry, said:

“Despite the implications of COVID-19, and Brexit, on the performance of many businesses, confidence in the London and UK economy has risen during Q1 2021 – albeit from a low base rate and still in negative territory.

“The successful initial roll-out of the vaccine programme, and the hope that it allows for a safe and sustainable reopening of the economy, is perhaps the driver behind that upturn.

“As we move along the road to reopening and recovery, the vaccination programme must continue to reach as many people as possible, and national and London government must put their full support behind the role that London, and its global economy, can play in driving the UK’s economic recovery from COVID-19.”

ENDS.

Methodology: Savanta ComRes interviewed 500 London business leaders online between 4th February and 16th March 2021. Data were weighted to be representative of all London business leaders by size and broad industry sector. Savanta ComRes is a member of the British Polling Council and abides by its rules.

LCCI's Capital 500 report for Q1 2021 will be released on Thursday (April 1) and will be available here. The results will also be discussed on a webinar at 10.45am.

Results referenced above:

What do you expect to happen to the following economic indicators over the next twelve months?

Economic prospects for London: improve 29%, stay the same 26%, worsen 45%.

UK economic growth: improve 31%, stay the same 17%, worsen 52%.

Economic prospects for your company: improve 26%, stay the same 41%, worsen 33%.

Q4 2020:

Economic prospects for London: improve 20%, stay the same 20%, worsen 60%.

UK economic growth: improve 21%, stay the same 15%, worsen 64%.

Economic prospects for your company: improve 21%, stay the same 37%, worsen 42%.

Over the next twelve months, what do you think will happen to your…?

Turnover: increase 29%, stay the same 37%, decrease 34%.

Profitability: increase 26%, stay the same 41%, decrease 33%.

Q4 2020:

Turnover: increase 24%, stay the same 35%, decrease 41%.

Profitability: increase 24%, stay the same 35%, decrease 40%.

Excluding seasonality, how have the last three months compared to the previous three months in terms of:

Domestic sales: up 15%, same 43%, down 42%

Business domestic orders: up 10%, same 44%, down 45%

Cashflow: up 12%, same 38%, down 50%

Q4 2020:

Domestic sales: up 14%, same 41%, down 45%

Business domestic orders: up 10%, same 43%, down 46%

Cashflow: up 15%, same 36%, down 49%

Excluding seasonality, how have the last three months compared to the previous three months in terms of: