Purchasing Managers Index suggests businesses in the capital are faring better despite economic storm
Business activity has expanded in London despite a marginal contraction in November, according to a survey released today. The expansion was indicated by the rise in the Lloyds TSB London Business Activity Index, from 49.3 in November to 53.2 in December.
Lloyds found that output was increased at a solid pace throughout December in London also in the UK as a whole.
“Businesses in London ended the year on a high, as activity rebounded from November’s contraction,” said Ian Patterson, area director for Lloyds TSB Commercial in Central London.
“Business activity also rose at the quickest rate out of the regions in the final quarter, bringing London in line with the UK average.”
Growth of new business has accelerated over the month, indicating signs of a strengthening in demand. It’s not all good news though, as according to the survey new order growth was subdued compared with previous years, and down from the rates recorded in the third quarter.
The expansion has also been put down to a reduction in headcounts across the region as employment fell at the sharpest rate since October 2009 in London, contrasting with the rest of the UK which recorded no change in employment.
Patterson said: “While December saw the sharpest reduction in headcounts for two years among London’s businesses, the acceleration in new order growth may provide the much needed boost the labour market needs.”
Also aiding the increase in output, London’s private companies have put a hold on prices despite facing a sharp and quickening rate of inflation. The majority of firms left prices unchanged over December, fearing that any increase could reduce client demand as conditions remained fragile.