London businesses voice growth concerns
Businesses in London are less optimistic about the economy and their prospects in the latest quarter, the latest CBI/KPMG London Business Survey has revealed.
The Confederation of British Industry (CBI) and KPMG found that the number of businesses who were showing optimism for the next six months has fallen from 59% to 42% quarter-on-quarter.
Only 38% of firms in the capital are optimistic, down from 47% in the previous quarter as more voice their concerns over the potential for growth.
A lack of economic growth is the primary concern for businesses while regulatory pressures also impacting upon performance.
Growing uncertainty over the UK’s role in Europe is also a concern that has previously not been considered.
However, expansion plans remain robust regardless of these fears with 65% of businesses revealing that they plan to expand in the coming year. Nearly 50% plan to do so in London; up 10% from the previous quarter and represents the highest proportion this year.
Political tension and issues in the Eurozone have caused optimism to drop, with concerns over jobs and office space should the UK leave the EU. However, levels of expansion suggest that firms are willing to take risks, although this could impact upon their financial situation.
Should something not go as planned then the cash flow of the business could be impacted and, depending on the severity of the situation, company insolvency may be required.
London is one of the key cities globally and keeping it competitive with innovative approaches is essential. The fact businesses are still pushing ahead with their plans is encouraging but these firms should keep a careful eye on their finances.
With the distraction of the general election looming, the next six months are a time when businesses need to ensure progress is made but in a safe and sustainable manner.
Growth in the capital will inevitably drive growth across the UK while any decision relating to the UK and the EU could have major repercussions for all types of businesses.
By Phil Smith