Only 4 per cent of London’s micro businesses increased their workforce in Q3, compared with 32 per cent of firms with 10 or more employees, according to a survey published this month by the London Chamber of Commerce and Industry.
Sixty-five per cent of micro businesses were operating below full capacity, compared with 37 per cent of larger firms. Across London as a whole, 64 per cent of businesses were below full capacity, up from 59 per cent in Q2.
Cashflow also differed by business size. It fell at 31 per cent of micro businesses and 17 per cent of larger firms. While 42 per cent of larger businesses reported improved cashflow, only 11 per cent of micro businesses did.
Recruitment and investment were also concentrated among larger firms. Six in ten tried to recruit in Q3, compared with 8 per cent of micro businesses. Across all businesses, one in ten attempted to recruit, unchanged from Q2. Of the businesses that tried, 55 per cent reported difficulties, down from 61 per cent.
A quarter of larger firms increased spending on plant and equipment, compared with 5 per cent of micro businesses. Across all businesses, 6 per cent increased investment and 10 per cent reduced it.
Expectations for businesses’ own prospects became less negative. The proportion expecting their prospects to worsen fell from 37 per cent in Q2 to 29 per cent in Q3. Seventeen per cent expected an improvement, while 55 per cent expected no change.
London Chamber of Commerce and Industry chief executive Karim Fatehi OBE said the Autumn Budget was “a critical opportunity for the government to stimulate recruitment, reduce business costs and make London more internationally competitive”. The Chamber is calling for lower business costs, business rates reform and changes to planning rules.
YouGov conducted the online survey between 5 and 28 August, covering 514 senior decision-makers in London businesses. LCCI says the results are weighted to represent private-sector businesses by size and industry.
The Autumn Budget is due on 28 October.