London PMI Shines Bright: Manufacturing and Services Push Past June’s Record
NatWest’s latest London PMI shows the city’s manufacturing and service sectors are dancing ahead of March, moving from 52.4 in September to a luscious 53.8 in October. That’s the strongest jump since June, and a sign that London’s business wheel is turning hotter than a midsummer London‑pie.
Business Surge Attributed to New Customers & Fresh Products
Surveyed firms said the key drive was a sharper uplift in new business. “We’re seeing more hands in our order books, and that’s exactly what pushed activity up,” one manager noted. New orders for London’s private sector kept growing in September and kept the momentum going in October. More customers, more launches – the secret sauce of a booming economy.
London’s Growth Outpaces the Rest of the UK
While the rest of the country has seen a fourth month of dwindling work intakes, London’s output kept on the rise – a “solid expansion,” a phrase used by many. The West Midlands is the only other region flirting with growth, but London remains the top spot. However, even as output giddy up, confidence for next year dipped to its lowest 2023 mark – a sign that worries about tighter financing are creeping in.
Sales Strategies & Project Pipelines Fuel Optimism
- Sky‑high sales campaigns
- New product launches
- Robust pipeline of projects
All of these kept the doors open for hope in October, but some firms warned of looming caution thanks to tight budgets and clients hoarding inventory.
Fourth‑Quarter Kicks Off With Employment Downturn
It’s the second consecutive month London is trimming the workforce, after a honeymoon of eight months of hiring last year. The Employment Index fell well below the neutral 50.0, the sharpest dip since January 2021 and the fastest drop in the UK.
Some companies are hiring to meet demand, while others are cutting staff to control costs. Amid all this, London firms have been tackling their current orders downwards, but the pace of the “backlog clearance” dulled to the slowest in the rating cycle. The decline is also the mildest among all 12 UK regions.
Cost Inflation Slips, But Prices Keep Rising
The November Input Prices Index slumped to its lowest level since April 2021, hinting that inflation pressures are easing. Yet, wage hikes remain the major cause of higher costs, with some firms also feeling pressure from tighter supplier deals.
A second month in a row, the Prices Charged Index climbed sharply – the biggest jump in London’s charges since July. Companies are passing along cost gains to crack open healthier margins after a rough inflation roller‑coaster.
Expert Take
Catherine van Weenen, NatWest London & South East Board: “Our latest PMI shows London’s economy is still on a buoyant track. Businesses kept growing customer and sales momentum in October. London is the sole UK area with a solid rise in activity – compared to mild growth elsewhere or declines.”
“Despite lighter jobs and a dip in expectations, the city’s resilience is clear. London stands out, just like the West Midlands and South West showed modest increases. Elsewhere, activity fell.”
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