Business confidence in London rose eight points during August to -13%, according to the latest Business Barometer from Lloyds Bank Commercial Banking.
Companies in the capital reported higher confidence in their own business prospects month-on-month at -13%. When taken alongside their views of the economy overall, this gives a headline confidence reading of -13%.
The Business Barometer questions 1,200 businesses monthly and provides early signals about UK economic trends both regionally and nationwide.
When asked about the impact COVID-19 was having on their business, the majority of firms continued to see demand negatively affected during August. 66% experienced a fall in demand for their products and services, the same proportion as the month before. One in ten (11%) experienced an increase in demand, unchanged on July.
Some businesses expect to make redundancies following the end of the furlough scheme in October. When asked about job retention among firms with furloughed staff, only 16% expect to bring back more than 90% of their staff.
Almost a quarter (23%) of London firms surveyed said they weren’t currently using the Job Retention Scheme.
When asked about social distancing measures, almost half (46%) businesses said they could, in theory, operate at full capacity while remaining COVID-secure, although more than a quarter (29%) said they couldn’t operate fully within the rules.
Of the 52% of businesses reporting disruption to their supply chain during August, 39% expected the situation to improve within six months, while 7% expected it would take more than a year to return to normal levels.
Paul Evans, regional director for London at Lloyds Bank Commercial Banking, said: “It’s encouraging to see firms’ outlook improving for a second consecutive month, but there’s clearly still some way to go. The introduction of VAT cuts and the Eat Out to Help Out scheme will have provided a boost to the capital’s huge hospitality industry and contributed to the improved picture this month.
“We remain by the side of businesses across all sectors in the capital to help them emerge from this pandemic in as strong a position as possible.”