An increase in new business for London companies helped the capital’s private sector prosper during January, according to a survey.
London and the eight other English regions enjoyed a rise in private sector business activity last month, the Lloyds TSB survey found, boosting hopes of a recovery. The positive figures for London come after business slipped towards the end of 2011.
However, London was the only region to see a slide in private sector staffing levels in January.
The capital was also the only region to see an outright fall in employment numbers, although private sector job creation was relatively modest across all the regions, the survey found.
A resurgent manufacturing sector helped the West Midlands lead the regions in increasing private sector business activity, replacing Yorkshire and the Humber at the top of the table.
The West Midlands also benefited from a rise in new business in January.
The results of the survey add to the mixed signals the economy has been providing in recent weeks. Many analysts are predicting the country will fall back into recession in the first quarter of this year, but recent surveys from the powerhouse services and manufacturing sectors have been better than forecast.
Lloyds TSB Commercial group director John Maltby said: “January’s survey shows that there was a solid improvement in private sector business conditions at the start of the year.”
Businesses have been aided by weaker input price pressures during the latest survey period, the report said, mainly caused by reduced energy bills and the knock-on effects of lower raw material costs on world markets.
Private sector companies’ output charges were also relatively unchanged during the months, the survey shows. Pricing power has been squeezed due to strong competition for new work.
But job creation remained quite low because outstanding workloads continued to fall and margins have come under pressure. Employment growth remains robust in Yorkshire and the Humber and the West Midlands, which buck the trend.
Anecdotal evidence points to stronger workloads supporting job creation in January, Lloyds said. However, uncertainty about the economy as a whole and spare capacity weighed down on staff hiring.
The prices charged by private sector firms in England were largely unchanged during January, the survey shows. Strong competition for new work was created by subdued demand and pricing power has been squeezed as a result.
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