Recently we discussed how according to the latest data from UK real estate agency Savills, prospects are looking good for the economic future of London as foreign interest continues to drive investment in the capital. Within that previous article we also touched upon how the London office market has begun to adapt; where once the financial sector reigned supreme, it is now the tech giants and creative companies which are underpinning the city’s success. Well, this assertion has now been backed up by the latest CBI/CBRE London Business Survey, which found that firms view the tech and creative sectors as fundamental to London’s future prosperity.

Of the 271 respondents to the London Business Survey, two-thirds (65%) said that the tech and creative sectors were the principal sectors for the capital’s economic growth over the next five years, followed by professional services (49%) and FinTech (47%).

While the vast majority of firms (91%) continue to rate London as a good or great place to do business, the survey does make apparent the fact that if the capital’s future growth is to be secured, bolstering the resilience of the city’s infrastructure is vital. To this end, 69% of firms want the Government to push ahead with Crossrail 2, whilst 59% of businesses want Heathrow’s third runway to be a priority project.

The survey also delved into the ramifications of the Brexit vote, which is sure to have a significant impact upon businesses in London given the fact that 88% of companies in the city currently employ EU nationals. The data reveals that for 73% of London-based firms, the UK’s ongoing role in the EU following Brexit is seen as a top concern; 69% have gone so far as to develop, or be in the process of developing, a contingency plan for the time after the UK departs from the EU.

In addition to this, over a quarter of respondents (27%) indicated they are planning to move part of their operations overseas, while 62% are developing a strategy to address skill shortages that could be incurred if restrictions are placed on EU nationals working in the UK.

This uncertainty surrounding Brexit has created a situation whereby just 10% of companies feel optimistic about the economy in the next six months (down from 19% in the previous survey), and only 16% feel more optimistic about their own business prospects over the next half year (down from 26%).

Eddie Curzon, CBI London Director, said of the survey’s results, “Despite the political uncertainty in the air, London continues to enjoy sound economic health and strong business fundamentals. Nine in ten firms say our city is a great place to do business, whilst investment, expansion and hiring plans are all running high.

“The capital’s booming, world class tech and creative firms hold the key to unlocking the growth that will ensure the city remains a global business powerhouse for years to come. If the city can also push ahead with quality infrastructure projects – from HS2 and Crossrail 2 to Heathrow’s new runway – we will see London cement, and further, its reputation as one of the best places in the globe to live, work and grow a business.

“It’s clear Brexit is weighing heavily on minds in the capital though, so it’s absolutely vital that substantive progress is achieved during the Brexit negotiations and that comprehensive, time-limited transitional arrangements are agreed with all urgency. Our businesses need to make decisions now about investment and employment that will affect economic growth and jobs in the future. London – and the country as a whole, which benefits from a flourishing capital – needs the best business environment in which to grow, create jobs and boost prosperity.”

Adam J. Hetherington, CBRE’s Managing Director for London, also commented, “Even though the on-going Brexit negotiations continue to provide a significant degree of uncertainty, it is encouraging to see that 57% of businesses plan to maintain their current investment plans, representing an increase from the previous survey. Additionally, 60% reported planning to expand their organisation over the next 12 months, with the majority planning to do so both in London and the UK.

“It is therefore clear that the capital remains at the forefront of business strategies and the resilience of the London market, coupled with its strong fundamentals, is widely recognised.

“Central to this is London’s position as a hub for the dynamic tech and creative sectors. With the Brexit negotiations creating uncertainty in the occupier markets, it is not surprising that 65% of respondents cited them as principal sectors for the capital’s economic growth over the next five years. However, the extensive improvement of London’s infrastructure, as well as the unrivalled cultural and social benefits the capital provides, will be vital in continuing to attract new talent and ensuring that London continues to compete on a global stage.”

Sam Bonson

Sam is an aspiring novelist with a passion for fantasy and crime thrillers. He is currently working as a content writer, journalist & editor as he continues to expand his horizons.
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