Access to the European Union’s Single Market is the single greatest strength of the United Kingdom’s capital, according to 95% of over 200 of the city’s business leaders responding to the latest CBI/CBRE London Business Survey1.
Three quarters of businesses (74%) have customers, and nearly two thirds (63%) have suppliers, in EU countries, providing London with a significant advantage over other global cities. Indeed, 93% of firms rate the capital as a good, or very good, place to do business, and 83% deem London’s status as an international hub – and the reach that that provides – as being above average when compared with cities like New York, Hong Kong, Paris and Tokyo.
The capital has been quick to adopt cutting edge technology, with three fifths of businesses (57%) citing London’s average performance in this area compared with global peers. The city’s infrastructure was also rated as average by half of firms (48%), when put alongside international cities.
Two thirds of firms (61%) believe that the tech and creative sectors will be the driving force behind London’s growth in the next five years (followed by the FinTech and professional services sectors (50%). Over half of the capital’s businesses (55%) are satisfied with their digital coverage, but a lack of digital skills (36%) need to be addressed to take full advantage of the opportunity presented.
Lucy Haynes, CBI London Director, said:
“From the strength of the capital’s professional services sector to our ability to adapt to an ever-changing digital landscape, it’s clear that London is an international trailblazer.
“Keeping London ahead of our global competitors will be a top priority for the capital’s businesses. Access to the European Single Market of 500 million consumers is obviously a major boon to London’s firms, and this survey shows the strong desire of the capital’s firms to remain in a reformed European Union.
“Having world-class digital infrastructure and skills will also be the key to unlocking the opportunities presented to the city - especially in the booming tech and creative sectors – so we will need to ramp up our investment in these areas.”
Adam J. Hetherington, Central London Managing Director, CBRE UK, said:
“Ensuring London maintains its attractiveness on a global basis, and indeed outpaces other global cities across North America, Europe and Asia, is critical to its future success. The capital’s connectivity is key; both global occupiers and capital from across all sectors have been flocking to London in recent years and the city has thrived, thanks in part to its safe haven status.”
Confidence about the economy has lessened amongst the capital’s firms since September’s uniquely strong showing. A fifth of companies (20%) now feel more optimistic about the UK economy over the next six months, and just over a quarter (29%) feel the same for their individual business prospects.
Over a third of firms (36%) plan to increase headcount, but just over half (53%) plan to hire only where essential. The top concerns for London’s businesses remain retaining their best people and the lack of appropriately skilled staff, as well as uncertainty over the UK’s role in Europe. The capital’s biggest weak spot remains the cost and availability of housing (93%). Road and rail links also require improvement, according to over half of firms (54%).
London also helps to drive growth outside of the city, with over three quarters of firms (78%) having suppliers, and over four fifths of businesses (83%) having customers, outside of the capital.
As the world gears up for the 2016 Olympic & Paralympic Games in Rio de Janeiro, the Survey found the London 2012 Olympic & Paralympic Games acted as a catalyst for regeneration and infrastructure investment (63%), with more than half of firms (55%) saying the Games boosted tourism.