The survey showed that while most firms still feel some impact from the recession, spending plans have improved on six months ago
The survey shows that 53% are optimistic about their future business prospects, up from 47% six months ago. 58% of firms plan to expand their business in the next 12 months, with 32% of those planning to expand within London.
Most of the capital's senior executives (80%) say they think London is a good place to do business, which is in line with the previous two surveys conducted in October 2009 (86%) and April 2009 (80%).
However, firms are concerned about the impact of the new 50p rate of income tax. 57% believe it could stop businesses from choosing London as a base or staying in the UK in the long-term. The cost of doing business in the capital is seen as a weakness by 78% of firms, as is its transport system (46%).
Firms' investment plans are more positive than six months ago. In this survey, 31% plan to increase spending on recruitment & training, IT infrastructure, equipment, plant & machinery and on product and process innovation. 34% plan to spend more on marketing and promotion. The only area where firms on balance expect to invest less is land & buildings.
Companies were asked to comment on the impact that Boris Johnson, the Mayor of London, has made in his second year in office.
For the second year running, bosses thought the biggest impact the mayor has had is on improving London's reputation, and this was followed by transport and support to business. Areas where firms clearly felt there was room for improvement were in housing, skills and the economy.
Concern about skills shortages is creeping back up the agenda for London businesses, with 44% saying they can't find enough skilled staff, up from 38% a year ago. This remains well below levels of concern seen before the recession however, when in March 2007 74% of firms reported skills shortages.
Nigel Bourne, director of CBI London, said: "There is a growing sense of optimism among London's businesses, with firms more upbeat about the coming six months. Even though most companies rate the capital as a good or very good place to do business, the cost of operating a business in London, the level of taxation and the transport system are all seen as denting its ability to compete on the world stage.
"After a second year in office, businesses think the Mayor is making a positive impact on people's perception of the city, and on its transport network. But neither he nor the government should be complacent. We must continue investing in London's vital infrastructure and ensure it can compete with other cities globally. Nurturing home-grown talent is also going to be important during the recovery."
Richard Reid, London Chairman of KPMG, said: "With over half of the capital's businesses planning to expand and increase spending in the second half of this year it is clear that London will continue to be the driver of economic growth in the UK. The Government needs to continue to work with the private sector to ensure that much-needed investment projects such as Crossrail happen and that we don't slip behind other global centres.
"London is now in competition with the fast-growing economies of the Far East, which devote more of their GDP to infrastructure investment than any other region in the world. How we approach the problems of an ageing transport network in London will determine our future attractiveness and competitiveness."
