Growth in London’s private sector slowed in August, but the capital outperformed the UK as a whole as new business, activity and employment all expanded.
Despite the expansion, companies’ overall confidence fell to a five-month low in August as Brexit uncertainty weighed on sentiment.
The London purchasing managers’ index (PMI), a gauge of the private sector’s health, fell to 51.7 in August from 52.8 in July, Natwest and data firm IHS Markit said. A score of over 50 indicates expansion.
“New work was the main factor underpinning activity growth, according to survey members,” Natwest and IHS Markit said.
The PMI score was joint second best out of all the regions in Britain, with the east of England taking the top spot and London tying with Yorkshire and Humber.
A raft of weak PMI data last weak showed the UK economy is in a perilous position after shrinking by 0.2 per cent in the second quarter. The services, manufacturing and construction sectors all underperformed in August.
In London, private sector employment increased in August. “The pace of job creation was modest, however, and softened from July,” said Natwest and IHS Markit.
“Widespread concerns about the negative impact of lingering Brexit uncertainty and a lack of resolution in sight were the main factors restricting positive sentiment during August.”