The LCCI found that confidence levels in the London economy have risen by 43% from the previous quarter.
"Nearly half of businesses (47%) expect their prospects to improve over the next 12 months," said the LCCI.
Investment by companies also increased during Q1 with the balance for investment in plant and equipment reaching its highest point since 2009.
"Many of the key performance indicators have shown little signs of improvement but London businesses are clearly more optimistic about the future than they have been in recent times," said LCCI chief executive Colin Stanbridge.
"The summer of 2012 is a great chance for London businesses to showcase themselves to the world. The challenge comes from converting this new confidence into genuine growth for London that lasts beyond the extinguishing of the Olympic Flame," said Stanbridge.
Conditions do remain challenging however, with the balance of sales to export markets falling flat in Q1 while the balance for future overseas orders fell into negative territory for only the second time in the last 11 quarters.