After a year that’s been bad for both businesses and consumers, it might be assumed that business forecasts are going to be negative. However, a survey of London businesses late in 2023, gives mixed signals. Most expect difficult times in the first half of 2024 — but a surprisingly large number also expect to increase their profits this year.
Fears for Economic Activity in 2024
In a survey of 500 London-based businesses by Savanta during October and November last year, 66% flagged up inflation as their primary concern for 2024 and considered it a bigger issue than in previous months.
The biggest drivers for this concern were fuel costs, energy costs and interest rates. 52% of the businesses questioned expected that they’d need to pass on utility and inflationary costs to customers in price rises. A sobering figure is that a mere 28% of London businesses expect the economy of the capital to improve in 2024.
Optimism About Profitability in 2024
Given this gloomy atmosphere, a surprising number of London businesses expect to do well in 2024. Around half predict that both their turnover and their profits will rise during the year.
This optimism appears to derive from increasing consumer demand at home. The survey found that 25% of businesses, more than in the 3rd quarter, reported an increase in demand for their services or products. At the same time, 26% reported that their cashflow had increased, as opposed to 23% in the previous quarter.
However, not everything is positive. The prospect for exports seems more uncertain, with the number of businesses reporting increased exports falling from 15% to 11%.
What Does This Mean for You?
Karim Fatehi CBE, Interim Chief Executive of the London Chamber of Commerce and Industry (LCCI), considered that:
“These findings present a mixed picture for our city… As we look ahead to the UK general election in 2024, businesses desperately need clarity on the Government’s — and The Opposition’s — strategy to improve the current operating climate. Only then will businesses, the lifeblood of our economy, be able to see through the current storm and plan a long-term route for growth.”
Until then, as always, businesses need to boost their own cashflow, without expecting help from external economic sources. This means ensuring that payment is delayed on as few invoices as possible.
Give me a call to find out how I can help you go after your won’t-pay customers and find ways for your can’t-pay ones to settle their debts as quickly as possible. With a healthy cashflow, maybe your predictions too will be for growth during 2024.