Recession keeps South London businesses depressed
5th October 2009
Depressed economic times, minimal pay increases and a freeze on employment are the most likely economic outlook for south London in the coming six months, according to the latest survey of firms carried out by South London Business.
The survey is the largest undertaken since the start of the recession which specifically targets businesses in South London. More than half of businesses say they are not expecting to raise salaries at all in the next year while 60% expect employment levels to remain the same.
The results, which have been analysed by statisticians at Brunel University, also show a deterioration in business optimism for UK economic growth; more firms than in previous surveys (nearly 40%) believe that growth will be lower in the second half of 2009 than in the first.
Despite the gloom, companies continue to plan positive steps to try to improve their economic prospects. In the next 12 months, 45% say they are planning to increase market share, launch new products or services (38%) or expand into new sectors or markets (33%).
Peter Pledger , chief executive of South London Business, says: “It is clear that firms in South London remain resilient in the face of adversity, with so many of them continuing to try to grow their businesses during such difficult times. We will be working hard to provide advice and practical guidance wherever possible to help them meet the challenges and be ready to meet the upswing when it comes.”
More than 350 firms completed the survey, with the largest proportions coming from the boroughs of Croydon and Bromley, followed by Kingston, Richmond and Merton, then Greenwich, Lambeth, Sutton, Lewisham, Bexley, Wandsworth and Southwark.
Firms say they choose to be based in South London for two main reasons – access to customers, (40%), and quality of life (28%) – with around three quarters saying they are either satisfied or very satisfied with their location.
The top three issues that businesses want addressing are the cost of business rates, cost of premises and transport links. The survey concludes that it is possible South London’s appeal as a business location may start to be eroded by the increasing costs put on local businesses, such as the Chancellor’s recent increase in the business rate multiplier, the imminent 2010 rate revaluation and the supplementary business rate.
“The government is not being fair to South London as the increases in business rates for London firms and the supplementary business rate are going to create an unsupportable tax burden for most South London companies,” said Peter Pledger. “The government needs to realise that its role should be to create an environment in which business growth can thrive, rather than continue to penalise South London for its success.”
This survey was kindly sponsored by Biggin Hill Airport, Greenwich University, HSBC, South London Partnership, and Towergate Insurance
The winner of the free one page editorial in the South London Business magazine by way of thanks for completing the business survey is Hallite Seals.
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