Recession hits business confidence in South London

12th December 2008

Business confidence in South London firms has taken a nosedive compared with a year ago, although slightly more than half still anticipate turnover to increase.  These are the principal findings in the latest survey of firms undertaken by South London Business.

The results of the survey, carried out during October and analysed by statisticians at Brunel University, showed that while 23% of the firms said that their overall business confidence was higher than six months ago 37% said it was lower. This is a significant collapse in overall confidence as in the previous survey the percentages were almost reversed with 38% more confident and only 20% less confident. 

Despite the gloom, however, companies were planning positive steps to try and improve their economic prospects.  Over the next 12 months many were planning to increase market share, launch new products or services, or expand into new sectors or markets.

The survey was completed before the two most recent cuts in interest rates which, note the survey report’s authors, will cushion some of the worst effects of the recession.

Some 54% of companies that completed the business survey said they anticipated that turnover would still rise, as against only 11% that thought it would decline. This relative optimism is reflected in the responses to the prospects for employment growth over the next six months with nearly a third saying job prospects would go up, although 7% felt they would fall.

But the news is not particularly good for graduates. Two out of every five businesses told the survey they did not need graduates despite the government aiming for about 50% of young people to go to university.

Almost 300 firms completed the survey, with the largest proportions coming from the boroughs of Richmond, Croydon and Kingston. Next came Bromley and Merton, followed by Lambeth, Sutton, Wandsworth, Greenwich, Southwark and Lewisham.

Firms are located in South London for two main reasons – access to markets -mentioned by nearly two out of every four firms, and quality of life, mentioned by 30%. South London as a business location appears to be a positive consideration for over three quarters of the firms with 78% reporting that they were very satisfied or satisfied with it.

For South London Business, Chief Executive Peter Pledger said: “Firms locally are reflecting the views of business throughout the UK. We will be working hard to provide advice and practical guidance wherever possible to help them through these difficult times and to be ready to meet the upswing when it comes.”

This survey was sponsored by Baker Tilly, Barclays, Business Link and South London Export Club, and run in association with Vovici.

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