Home Business NewsBusiness London business activity growth at four-month low

London business activity growth at four-month low

by LLB Reporter
13th Mar 17 7:39 am

Here’s why

Business activity in London rose at the slowest rate for four months in February as growth in new orders reached its lowest level since the post-referendum rebound began last August, according to the latest Lloyds Bank Regional Purchasing Managers’ Index (PMI).

The London PMI registered 52.9 in February, falling from 54.5 in January and signalling the slowest rate of growth since last October. A reading above 50 signifies expansion in business activity, while a reading below signals contraction.

New orders across the capital rose at the slowest rate for seven months, and one that was below the UK average.

Businesses, meanwhile, faced another sharp rise in costs caused by the weak pound and rising pay. As a result, firms again increased the prices they charged customers.

Employment in the capital rose for the fourth month in a row, with the rate of job creation increasing from the level recorded in January. While the capital’s businesses were confident about the growth forecast for the next year, optimism was significantly behind that of firms in the North West and Yorkshire.

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 volume of goods and services produced during February compared with a month earlier.

Paul Evans, regional director for London at Lloyds Bank Commercial Banking, said: “Business activity in London lost momentum from last month as growth of new orders cooled. Firms are also having to offset rising costs by passing on price increases to customers.

“Despite this, London’s companies were confident that business activity will grow in the next 12 months, although they remain less optimistic than the rest of the UK.”

 

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