London businesses are more upbeat about the coming half-year, but concern about skills shortages has risen in the past six months, research has revealed.
The latest biannual CBI/KPMG London Business Survey showed that 53% of employers were optimistic about their future business prospects, up from 47% six months ago. More than half (58%) of the 125 firms questioned plan to expand their business in the next 12 months, with 32% of those planning to expand within London.
Concern about skills shortages is creeping back up the agenda for London businesses, with 44% saying they can’t find enough skilled staff, up from 38% a year ago. However, this remains well below the levels of concern before the recession when, in March 2007, 74% of firms reported skills shortages.
Firms’ investment plans are more positive than six months ago. In this survey, 31% plan to increase spending on recruitment and training, IT infrastructure, equipment, plant and machinery and on product and process innovation. More than a third (34%) plan to spend more on marketing and promotion. The only area where firms on balance expect to invest less is land and buildings.
Most of the capital’s senior executives (80%) say they think London is a good place to do business, which is in line with the previous two surveys conducted in October 2009 (86%) and April 2009 (80%).
Nigel Bourne, director of CBI London, said: “There is a growing sense of optimism among London’s businesses, with firms more upbeat about the coming six months. Even though most companies rate the capital as a good or very good place to do business, the cost of operating a business in London, the level of taxation and the transport system are all seen as denting its ability to compete on the world stage.
“We must continue investing in London’s vital infrastructure, and ensure it can compete with other cities globally. Nurturing home-grown talent is also going to be important during the recovery,” he added.