London Business Boom Slows a Touch in May – What’s Up?
London’s bustling economy rolled through its first half of Q2 with a steady, but noticeably softer uptick in output. Even though the city’s manufacturing and service sectors were still firing on all cylinders, the pace of growth took a gentle dip.
NatWest London PMI ‑ The Numbers on the Table
- May’s PMI was 54.2, down from 57.4 in April – a clear sign that the expansion’s turbocharger is cooling a little.
- The slowest growth in seven months.
- Heads up: new business orders are still on the rise – 16 of the last 17 months have seen positive trajectories.
- Clients are chasing new products, better marketing, and a swell of real‑estate activity, keeping demand brisk.
Year‑Ahead Outlook: Still Bright?
- Over half of businesses (53%) expect output to grow – a positive shout from the future.
- Only 7% foresee a downturn – rallying optimism keeps the mood upbeat.
- Reasons for optimism: fresh products, new contracts, investment, exports and tech upgrades.
Cost Pressures: A Breather?
Costs still climbed, but the rise has slowed dramatically. Input inflation slipped to its weakest spot in over three years, putting a dent in the rate at which prices of goods are moving up. Salary and IT costs are the main culprits, but the overall pace has eased.
“London businesses still saw activity climb in May, thanks to strong demand,” said Catherine van Weenen, a key player at NatWest. “We’re feeling confident that the spike in inflation last month was just a blip. Costs are easing, and we hope that points to a steady slowdown in inflation. Even if the slide is slow, it’s happening.”
So, while the city’s economic engine isn’t as revved up as before, it’s still humming and might just keep growing at a steadier, gentler pace.
