London’s strength suggests economic recovery has further to run
London was once again the UK’s fastest growing region, according to a new survey, helping to drive a continued uptick in business activity across the country.
Natwest’s London purchasing managers’ index (PMI), a measure of activity in the private sector, rose to 57.4 in April, up from 57.1 the month before.
This meant London was the UK’s fastest growing region for the eighth consecutive month. Firms reported a sharp rise in new work, with increased client activity said to have supported the latest uptick in sales.
“The sharp and quicker expansion in the capital also supported growth in activity across the UK as a whole,” Catherine van Weenen, territory head of commercial mid market at NatWest, noted.
Nearly all nations and regions recorded a rise in business activity for the second month in a row. Only Yorkshire & Humber saw business activity decline. Even then, the pace of decline was slower than in March.
“Most areas of the UK are enjoying a revival in business activity, with growth even accelerating in most cases in April,” Sebastian Burnside, NatWest chief economist, commented.
Natwest’s survey echoes findings from BDO’s output index, which rose to its highest level in two years, when trading conditions were recovering from the Covid lockdowns.
The improvement was driven by firms in the services sector, with hospitality in particular showing an improving thanks to easing consumer headwinds. The survey noted that this trend is likely to continue as the weather improves.
The pair of surveys will raise hopes that the UK’s ongoing recovery from last year’s shallow recession could accelerate in the month’s ahead.
Figures out last week showed that the UK economy grew 0.6 per cent in the first quarter of 2024, its strongest performance for just over two years.
With interest rates likely to be cut in the summer and inflation set to fall further, many economists argue the economy will be able to maintain its momentum as the year progresses.