London’s business confidence was the strongest of any UK nation or region in November, according to the latest Business Barometer from Lloyds.
While London firms’ optimism in the economy fell five points month-on-month to 45%, business’ confidence in their own trading prospects climbed eight points to 70%.
Together, this gives a headline confidence reading of 57% (vs. 56% in October) – the highest recorded of any UK nation or region in November.
A net balance of 53% of businesses in the region also expect to increase staff levels over the next year, up 16 points on last month.
Looking ahead to the next six months, London businesses identified their top target areas for growth as investing in their team, for example through training (45%), entering new markets (39%) and evolving their offering, for example by introducing new products and services (36%).
The Business Barometer, which surveys 1,200 businesses monthly and which has been running since 2002, provides early signals about UK economic trends both regionally and nationwide.
National picture
Overall UK business confidence dipped slightly in November to 41% – down three points from October’s 44% – but remained above the long-term average of 29%.
While firms’ confidence in their own trading prospects strengthened two points to a net balance of 55%, their confidence in the economy fell nine points to 26%.
The West Midlands (51%) followed London as the second-most confident UK nation or region in November.
Sector Insights
Firms in the manufacturing sector reported the first rise in trading prospects in four months, with the net balance up three points to 49%. Companies in construction and services also indicated stronger business growth outlooks with net balances of 56% (up six points) and 61% (up four points), respectively. Retail firms, however, signalled softer prospects for a second month running, with the trading prospects’ net balance down six points at 45%.
Kirsty Sadler, regional director for London at Lloyds said: “It’s encouraging to see businesses in the capital so confident as we come to the end of the year and look ahead to 2025.
“We’ll continue to be by the side of the city’s businesses as they capitalise on new opportunities ahead. For hospitality and retail businesses, who are entering one of their busiest times of the calendar, this will include being on hand to support with factors like managing cashflow so that they have the flexibility they need to make the most of any upticks in activity.”
Hann-Ju Ho, Senior Economist, Lloyds Commercial Banking, added, “In November, the overall confidence metric fell by three points for the third month running. This is the lowest level since June, but still above the survey’s long-term average, which is ultimately positive from a longer-term perspective.
“These results suggest that while firms have mixed views about the economy, they see their businesses in a good place to cope with any challenges they might face. Hiring intentions, although moderating this month, haven’t fallen by much which is also positive news.
“Overall, these results show that businesses are still positive and feeling resilient, albeit with tempered views on the economic outlook.”
