Lloyds PMI shows increase in London business activity growth

Business activity growth reached its highest in six months in London last month, the latest Lloyds Bank Regional Purchasing Managers’ Index (PMI) has shown.

The London PMI registered a reading above 50, signalling growth in business activity in the city. October’s reading stood at 56.3, up from 54.1 from the previous month and the fastest rate of growth since April.

Demand

The Lloyds Bank PMI is an economic health-check of UK regions that gathers information from manufacturers and services businesses about the amount of goods and services that they produced in October compared with September.

The increase in business activity in London last month comes as a result of a rise in demand, with the PMI showing the fastest increase in new orders since July. New orders increased at a faster rate than the UK average in October, which helped to boost employment in the private sector.

Input costs continued to increase last month as a result of higher wage bills and rising raw material costs, which led to businesses raising the costs of their goods and services.

Encouraging

Commenting on the PMI index, Lloyds Bank Commercial Banking Regional Director for London Paul Evans said: “As we enter the closing stages of 2017, London businesses have seen activity gain new momentum.

“Creating and securing a strong new business pipeline is key to the capital’s economy and it’s hugely encouraging to see demand increasing as we approach the end of the year. Firms continue to face hefty input costs, but if new business growth continues then they will be better-equipped to manage these.”