London Continues To Lead Regional Growth In February - London Business News...

Reference: See here

Headlines:

London companies reported a sharp increase in output in February, marking another positive month for the capital's economy.

The headline London Business Activity Index – a seasonally adjusted index that measures the month-on-month change in the combined output of the region's manufacturing and service sectors – fell from 54.8 in January to 54.0 in February.

Although easing back from a seven-month high, the index signalled a robust expansion in private sector activity midway through the first quarter of 2025.

Surveyed firms commonly noted that rising domestic and foreign sales had driven activity higher in February.

Increased output was achieved despite lower staffing numbers, as capacity levels enabled firms to reduced backlogs of work.

Catherine van Weenen, Territory Head of Commercial Mid Market at NatWest, said: ⁘London maintained its position as the fastest-growing region in the UK in February, with activity levels increasing further in line with a rise in sales. Although some momentum was lost in both metrics, the increase in new business occurred at a time when most regions are experiencing contractions, suggesting that local firms are demonstrating greater resilience to current economic headwinds.

⁘Cost pressures eased slightly but remained close to the level seen in January, which was a nine-month high. Wage pressures continue to dominate balance sheets, according to surveyed firms, as the impact of upcoming changes to the minimum wage and employer national insurance contributions trickles through the economy, resulting in rising staff costs and vendor prices.

⁘As a result, many firms are downsizing their workforces to maintain healthy cost balances and tighten capacity. Although demand growth is strong in London, firms have reduced staff at a rate comparable to the nationwide trend, indicating that businesses perceive more risk than reward for the time being."

Growth in London remained well above the nationwide trend, placing the region at the top of the rankings for the third time in four months. The sharp upturn at the local level contrasted with only a marginal increase in UK activity overall.

#news