London's Economy Today - Issue 185 - January 2018

The overview

• Wide improvement in global economy prompts upward revisions to global growth forecasts, but UK forecasts remain broadly unchanged
• New analysis points to costs of a hard Brexit but suggests London will be less impacted than the rest of the UK
• Surveys point to subdued business confidence

Economic indicators

• Moderate increase in new business in London with the PMI New Business Index again positive (52.6) in December but this represents the lowest recorded level since February 2017.
• Most surveyors continue to have negative expectations for the next three months on house prices in London but at a less negative level than previously. The RICS index increased to -33 in December from -38 in November.
• The GfK index of consumer confidence, which reflects people’s views on their financial position and the general economy over the past year and in the next 12 months, was again slightly negative (-2) in December in London after the sharp fall seen in November. A score above zero suggests positive opinions; a score below zero indicates negative sentiment.

London’s Economy Today supplement: Where are the jobs in London? A 45-year sectoral and geographical perspective

• GLA Economics has produced a London Jobs series from 1971-2015 for sectors and boroughs.
• In 1971 the largest sector of the London economy was Manufacturing. Jobs in this sector had declined by over 85% by 2015, while Professional and real estate services had become the dominant sector and employee jobs more than tripled over the same period. These changes have been taking place gradually, and it was only by 2001 that the number of London employee jobs was higher than in 1971.
• While developments at the borough level have been more convoluted what has remained the same has been the strength of the jobs market in central London, and in west London around Heathrow airport, and particularly Hillingdon. Inner London has seen the strongest growth in jobs from specialisation in business services, and has been able to reap agglomeration economies from the clustering of sector jobs. West London has a more diverse economy.
• There are ten boroughs dispersed around London which had not recovered by 2015 to the level of employee jobs in 1971. Jobs growth has been weakest in areas to the east of London. What has distinguished the more successful areas is their ability to attract jobs in business services.

London’s Economy Today data on the Datastore

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