London's Economy Today - Issue 216 - August 2020

Key information

Publication type: General

Publication date: Thursday 27 August 2020

UK economic growth falls sharply as concern increases for businesses in the Central Activities Zone.
London’s labour market may be more at risk when the furlough scheme ends.
London had strong growth in 2019.

The Business activity PMI index at London private firms reached 55.5 in July from 46.2 in June. This is the first time a majority of firms are seeing an improvement in business activity since February, after a large fall by historic standards in the index between March and June. The Purchasing Managers’ Index (PMI) survey shows the monthly business trends at private sector firms. Index readings above 50 suggest a month-on-month increase in activity on average across firms, while readings below 50 indicate a decrease.
Between May and July, surveyors reported net expectations of a further contraction in London house prices (-15). However, this index has shown a continuous upward trend since March when it was -85.
The consumer confidence index in London was at -13 in August, the same figure as in July and very similar to its value in June as well (-14). The August level still represents one of the lowest levels in seven years. The GfK index of consumer confidence reflects people’s views on their financial position and the general economy over the past year and in the next 12 months. A score above zero suggests positive opinions; a score below zero indicates negative sentiment.

London is less import dependent than the UK. London runs a trade surplus with both the EU, and the world, while the UK as a whole is in deficit.
London had goods trade deficits in 2017 with the EU and the world of -£14bn and -£26bn respectively, while its services trade surpluses were £21bn and £57bn.
In 2017, London’s exports were £39bn in Finance, £26bn in Information and communication, and £21bn in Professional services. Imports in these sectors were £16bn, £9bn, and £15bn respectively.