London’s private sector bounced back last month from a weak April, with firms reporting the first rise in new business in 2019, according to a survey from Natwest.
The purchasing managers’ index (PMI) for the capital – which measures the output of the private sector – saw the biggest upswing of any region in May, with a score of 51.9. A score above 50 indicates growth.
In April London’s output declined as respondents pointed the finger at Brexit. Many firms had made costly preparations for the UK’s original date of departure from the European Union of 29 March.
Yet it performed much better in May. Firms in the capital were the only in the country to report a rise in backlogs, Natwest said.
The regional survey, compiled by Natwest with data firm IHS Markit, also showed that only London recorded a rise in outstanding business last month.
A pick-up in business saw London business take on new staff in May after cutting jobs in April, the survey data showed.
Sebastian Burnside, chief economist at Natwest, said: “After a difficult few months, the London private sector looks to be getting back on track, recording renewed growth in not only output and new orders, but importantly jobs.”
Yorkshire and Humber was the fastest growing region of the UK, the Natwest data revealed, followed by the North West. London came in third place, ahead of Wales.
Northern Ireland’s private sector continued its contraction in May after a difficult April, while Scotland also slipped into decline.
Despite only slight growth in the UK private sector overall, the survey data revealed that businesses in all regions feel positive about future growth.