As the start of a new working year gets fully underway in London, figures released by London Chamber of Commerce & Industry (LCCI) show the challenge that lays ahead to rebuild business confidence in the capital’s and UK’s economic prospects for 2021.
The data comes from LCCI’s ‘Capital 500’ – a quarterly survey of 507 London business leaders from companies of varying sizes, sectors and boroughs.
Q4 2020 performance resulted in three in five (60%) London business leaders telling LCCI that they expect the capital’s economic prospects to worsen in 2021 (20% said improve, 20% said ‘the same’).
Whilst 64% expect UK economic growth to worsen over the next twelve months (21% said improve, 15% said ‘the same’).
LCCI’s Capital 500 survey hasn’t reported such high levels of business leaders saying London’s economy will worsen in the coming year, since 2009 began, amidst the continuation of 2008 financial crash.
Q4 2020 figures also show:
- Businesses came under increased cost pressures from energy, fuel, finance, and raw material prices.
- 27% of business leaders said they expect the price of their goods and services to rise during Q1 2021.
- 45% of business leaders reported a drop in domestic sales in the previous 3 months.
- 32% of exporters reported a drop in export sales in the previous 3 months.
- 88% of businesses did not try to recruit in the previous 3 months.
- 71% of businesses said they are operating at under full capacity.
- 78% say their workforce will remain the same size during the first three months of 2021.
Richard Burge, Chief Executive of London Chamber of Commerce and Industry, said: “Lockdown, tier restrictions, problems at our ports, no workable Test and Trace system, limited tourism and business travel, and lack of clarity about the implications of Brexit domestically – are all issues that impacted London’s businesses at the end of 2020, and all carry into 2021.
“It’s little surprise therefore to see businesses downbeat about the economic prospects of London and the UK for the coming year.
“As 2021 begins, the Government must outline their pre vaccination plan. We need to hear how mass testing, a truly workable Test and Trace system and related isolation payments, will all provide an environment in which London’s economy can safely function in a way that it couldn’t in 2020.
“The capital’s businesses need to see the Government’s resolution to ensure the London and UK economy can function until widespread vaccination allows for a full recovery from Covid-19.”