London's Economy Today - Issue 218 - October 2020

The overview

• Social distancing restrictions raised in London as evidence points to falls in employment.
• IFS warns of possible future tax rises.
• IMF improves its global forecast, but recovery prospects are mixed globally.

Economic indicators

• In September, London’s PMI business activity index decreased compared with August, although sentiment remained positive. Business activity PMI index for London private firms went down from 56.4 in August to 55.1 in September. 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.
• The net balance of property surveyors reporting a rise in house prices in London recovered to its March level. In the three months to September, the net balance of property surveyors reporting a rise in house prices was 17. This level not only implies an increase from August (3) but also the highest figure in this index since February.
• In October, the consumer confidence index in London fell further to -28 from -16 in September. The October level represents the lowest level of this index since October 2012. It has been negative since April. 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's Economy Today supplement: The transition to a net-zero carbon economy for London: a sectorial analysis

• More than 60% of London’s greenhouse gas (GHG) emissions come from the three highest emitting sectors: Transport & Storage (35%); Electricity and Gas (15%); and Manufacturing (12%). Similarly, three sectors Transport & Storage (33%), Manufacturing (16%) and Wholesale & Retail (9%) account for more than 60% of London’s energy consumption.
• Transport and Storage is responsible for 35% London’s GHG emissions but only employs 4.7% of London’s workforce. Air Transport, the highest emitting sub-sector, only represents 0.2% of London’s employment. In contrast, Professional Services contributes less than 1.5% of London’s GHG emissions but accounts for 12% of London’s employment.
• The impact of the transition will be felt differently across London’s population. Among the highest-emitting sectors, Transport & storage is the most ethnically diverse: half of workers are from a BAME background.

London’s Economy Today data on the Datastore

• The main economic indicators for London are available to download from the Datastore.