Monday 7 July 2014
Strong pound hitting London's exporters
A survey of London businesses has highlighted stagnating export demand - with a tenth (10%) of firms reporting a decrease in export sales and only 11% reporting an increase. These disappointing export figures reflect the recent widening of the trade deficit and the strong performance of sterling.
The figures come as London Chamber of Commerce and Industry (LCCI) publishes "Capital 500", London's biggest and most authoritative business survey of over 500 business leaders, in partnership with leading polling agency ComRes.
Overall, London businesses are optimistic about their future prospects with 47% of the Capital 500 firms expecting an increased turnover over the next 12 months.
However, uncertainty about potential interest rate rises appears to be of growing concern to the Capital 500 businesses, with three in ten (29%) more worried about interest rates this quarter than three months ago, potentially leading to weakening business investment levels. Cost pressures are also bearing down on firms, as 47% saw the cost of energy for their business increase in the last three months and 42% felt pressure to raise prices due to overheads.
Chief Executive of LCCI Colin Stanbridge said: "While London firms are confident about their own business prospects, vulnerabilities remain. Weaker export demand, despite further recent Government assistance is particularly disappointing.
"London Chamber is supportive of provisions in the Small Business, Enterprise and Economy Bill to expand access to finance for existing and aspiring exporters, but further action is needed to help businesses explore new opportunities and prosper abroad. Interest rate increases will further strengthen sterling and affect exports and business confidence to invest. The Monetary Policy Committee must send a clear and consistent message on the timing and pace of any interest rate increases."
Chairman of ComRes Andrew Hawkins said: "ComRes is proud of its long association with LCCI and we are delighted to be working in partnership to deliver data of the highest quality for the Quarterly Economic Survey. With the survey expanded to take in a wider cohort of London businesses, the QES is more authoritative and robust than ever before. It is particularly interesting to see that the so-called 'cost of living agenda' so strongly championed by politicians is as relevant to the business community as to the general public."
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NOTES TO EDITOR:
- ComRes surveyed a total of 506 London business leaders online between 19 May and 11 June 2014. All sectors of the London economy were represented including financial (8%), legal and business services (11%); professions (9%); manufacturing (4%) and industry (5%); property and construction (8%); transport and logistics (2%); retail/wholesale (7%); hospitality, leisure and tourism (6%); communication, technical and creative (15%); and other services (16%). All data has been weighted to be representative of all London businesses by company size. ComRes is a member of the British Polling Council and abides by its rules. Data tables are available on the ComRes website, www.comresgobal.com
- London Chamber of Commerce and Industry (LCCI) is the capital's largest and most representative business organisation, with members ranging in size from multi-national companies to SMEs and sole traders.
- Colin Stanbridge is available for further comment and interview.