Business activity growth in London reached a six-month high in October, fuelled by rising demand, according to the latest Lloyds Bank Regional Purchasing Managers’ Index (PMI).
The London PMI registered 56.3 in October, up from 54.1 in September and marking the fastest rate of growth since April. A reading above 50 signifies growth in business activity, whereas a reading below signals contraction.
The Lloyds Bank PMI, or purchasing managers’ index, is the leading economic health-check of UK regions. It is based on responses from manufacturers and services businesses about the amount of goods and services produced during October compared with a month earlier.
New orders rose at the quickest rate since July, surpassing the UK average. This growth in new business resulted in an uplift in private sector employment during October, and at a faster rate than the previous month.
Businesses continued to face sharply rising input costs, which, according to anecdotal evidence, were affected most by increasing raw material costs and bigger wage bills. In response, firms in the capital raised the prices they charge customers for goods and services in order to maintain margins.
Paul Evans, regional director for London at Lloyds Bank Commercial Banking, said: “As we enter the closing stages of 2017, London businesses have seen activity gain new momentum.
“Creating and securing a strong new business pipeline is key to the capital’s economy and it’s hugely encouraging to see demand increasing as we approach the end of the year. Firms continue to face hefty input costs, but if new business growth continues then they will be better-equipped to manage these.”