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Employment in London’s private sector rose at the fastest rate for over one-and-a-half years in August, despite a dip in new business growth, the latest Lloyds Bank Regional Purchasing Managers’ Index showed.
The London PMI registered 52.8 in August, down from 53.2 in July and behind the UK average (54.0). A reading above 50 signifies business activity expansion.
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 August compared with a month earlier.
London saw rising employment for the tenth consecutive month, as the pace of job creation reached its fastest rate since January 2016. However, business orders rose at the slowest rate for six months and overall activity growth cooled slightly since July.
Businesses also faced higher input costs in August, which increased at their fastest rate since February this year, due to the continued weak pound and rising salaries. Average prices charged for goods and services rose marginally and more slowly than in July.
Paul Evans, regional director for London at Lloyds Bank Commercial Banking, said: “The London economy remained in a low gear in terms of growth during August, with business activity rising at a slower rate than the UK average for the third month running.
“However, the highlight from the latest survey was a pick-up in the rate of job creation in the capital to a 19-month high, helped in part by a sharp strong rebound in business confidence.”
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