London’s economy is firing on all cylinders and has raced ahead of every other region in the UK as spending in the capital climbs to the highest level in a year, a new survey shows.
According to NatWest and S&P Global’s regional purchasing managers’ index (PMI), businesses in London are performing better than in any other area of Britain.
The pair’s output index hit 55.1 in March, far above the 50 point threshold that separates growth and contraction, although it was a slight drop from February’s 56 reading.
New business volumes hit their highest rate in 12 months at 58.6, hoisted by “improving client confidence, new projects, increased development and higher demand from overseas markets,” NatWest and S&P Global said.
That increase in demand convinced London companies to take on more workers, with the employment index topping the growth barrier for the third straight month.
London’s best in class performance signifies it could help drag the UK economy away from the much tipped recession.
Catherine van Weenen, NatWest London and the south east regional board, said: “The March PMI data solidified the capital’s strong performance in the first quarter of 2023, as activity continued to rise strongly in the wake of another sharp uplift in new business volumes.”
The Bank of England and Office for Budget Responsibility have both canned their recession predictions, although the International Monetary Fund last week said it thinks the UK economy will shrink 0.3 per cent this year.
NatWest and S&P Global’s UK PMI topped the 50 point growth threshold.
A big reduction in international energy costs after they surged following Russia’s full-scale invasion of Ukraine and an easing in supply chain tensions eased pressure on London businesses to hike prices, signalling inflation in the capital is on a downward path.
The prices charged index fell for the first time in three months and to the lowest level since August 2021, the PMI showed.