Firms in the capital feel London is still a good place to do business, while employers are also being encouraged to do more to motivate their staff.
A poll carried out by the Confederation of British Industry (CBI) revealed that businesses in London are the most optimistic they have been in 18 months about prospects for the coming half-year. 47% of firms said that they are positive about their future business prospects - the highest proportion since April 2008, with 30%.
86% still think the capital is a good place to do business and business performance has also improved, with fewer firms reporting failing business values than six months ago - 36% compared with 59%.
However, firms remain cautious about their investment plans, with 30% planning to cut back on recruitment and training.
Meanwhile, employers have been warned they are not doing enough to prepare and motivate staff for the New Year. According to the British Chambers of Commerce (BCC), only a quarter of employees have been given clear objectives for 2010, while a third do not even know if a plan for their business' future exists.
The report by the Department for Business Innovation and Skills suggested this is having a negative effect on employee motivation levels, as only 27% actually feel positive about the year ahead.
The BIS findings were echoed in another report by Croner, which found that almost a third of employees feel more negative about their career and job prospects for 2010 than they did last year.
Nearly half of all those surveyed have not received a pay increase for more than a year, while 41% do not expect an increase next year either.
Croner employment technical consultant Gillian Dowling said: "Although employment figures are showing promising signs of improvement and redundancies are beginning to ease, we still have a long way to go."
She added: "Motivating employees who remain in the business after large scale redundancies will be an issue for 2010."