London Business Survey December 2011
More businesses now planning for Olympics, but concerns remain over transport and skills
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The latest CBI/KPMG London Business Survey, of 262 businesses (42% SMEs), shows a significant fall in business confidence. Only 13% feel more optimistic about prospects for the economy over the next six months, compared with 43% in June, and optimism about their own business prospects has fallen from 51% to 31% over the same period. Just over half (55%) say their top concern over the next year is the threat of a double-dip recession. The number of companies only hiring when essential has increased from 59% in June to 64% now. However, the majority of London companies (83%) and a quarter of SMEs (74%) rate the capital as a good or very good place to do business.
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The capital's top strengths are seen as its skills and talent pool; the access it has to global markets; and the proximity to customers/clients, but 25% of firms have been negatively affected by the introduction of the annual cap on the number of tier 2 visas to non-EU migrants. London's three major perceived weaknesses are overall operating costs, the tax environment, and transport - the same as in the June survey.
Businesses felt that the top three priorities for the candidates for next year's Mayoral elections should be promoting London internationally, improving the capital's infrastructure and strengthening support for small and medium-sized enterprises (SMEs).
With just over seven months to go until the Olympics, an overwhelming 92% of London businesses think the Games will benefit London internationally, and three-quarters (78%) say they are looking forward to the event. More companies are starting to think about business planning around the event, and only 13% of firms have not considered the potential transport and logistics impacts (down from 40% in June). However, the number of London businesses that feel prepared for these issues is still roughly the same as in June (32% compared with 36%), and the same number of firms as six months ago (39%) say they are still not prepared.
Sixty-two per cent say the summer's riots in the capital have not dented their confidence in the authorities' ability to deliver a secure Olympics.
On transport, companies think that overall there have been relative improvements across all modes over the past six months, apart from the roads, where 47% of respondents thought the network had deteriorated, compared with 62% in June.