The majority of London businesses expect to grow over the coming 12 months, easing fears that uncertainty about the wider economy might spark job losses. But companies report that skills shortages are hampering their expansion plans, with 60% reporting difficulties hiring the right people.
Partly reflecting this improved confidence, the Chamber of Commerce is forecasting that over the next two years, London's economy will grow at a faster rate than the UK, the US and the global economy. In 2001, the capital's GDP will grow by 2.4% compared to the UK (2.2%), US (1.8%) and the global economy (2.3%). And in 2002, 3.1% growth is forecast in London, against 2.1% in the UK, 3.0% in the US and 3.0% in the global economy.
However, the chamber's chief economist, Paul Valentine, warned that London's very success is putting unbearable strain on its infrastructure. Greater London's population has reversed a long-term decline, recovering from a low point of 6.7 million in 1983 to 7.4 million today. The number of commuters into central London has also grown considerably from 680,000 per day in 1991 to its current level of around 800,000, creating severe overcrowding on many parts of the rail network.
On top of the residents and commuters, the number of tourists visiting London has nearly doubled over the last decade. In 2000, nearly 30 million tourists visited London, compared to 16 million in 1991. 'Unless its transport system is improved, London will struggle to maintain its position as one the world's leading business locations,' Valentine warned.
The survey was sponsored by King Sturge, whose head of research, Angus McIntosh, echoed the warning from a property point of view. 'Without improvements to its basic infrastructure, London could become a less pleasant place to live and work and therefore fail to attract the right type of companies and people that it needs if it is to compete effectively in the future as a successful global city,' he warned.
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