London leading UK’s economic recovery at last

Tim Wallace
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London is leading the recovery

LONDON’S businesses are growing strongly, raising hopes that a private sector recovery could finally drag the economy out of the current downturn, according to figures out today from Lloyds TSB.

Survey data shows improving private sector activity for the fifth consecutive month, with London’s growth accelerating.

The purchasing managers’ index surveys firms to plot rising and falling output by region. A score of above 50 indicates increasing levels of activity.

London reported a PMI of 53.8 in March, up from 50.8 in February and indicating an acceleration.

The UK overall reported a more modest improvement with the PMI increasing from 51.1 to 51.4.

The south east showed another expansion at 51.7, though slightly slower on the month – down a touch from February’s score of 51.9.

Overall six of the nine English regions showed growth, with only the south west and north east suffering falling output.

Scotland’s businesses continue to expand with a score of 51.1, while Wales accelerated to 53.7 making it the second fastest growing region behind the capital.

Analysts hope improving output indicates the economy is gradually getting back on the track to recovery.

“This should provide encouragement that both manufacturers and service providers are continuing to find opportunities to expand their businesses, despite temporary weather disruptions and worries of a triple dip across the wider UK economy,” said David Oldfield from Lloyds TSB.

“However, pressure on operating margins and uncertainty about the economic outlook meant that businesses generally opted for a wait-and-see approach to hiring, with only a minority of regions reporting employment growth in March. This suggests that there is still some way to go before confidence is fully restored among UK businesses.”