Economy
Operating conditions in London remain poor |
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| Written by Gary Howes | |
| Tuesday, 10 February 2009 | |
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However the RBS and Markit PMI report on the capital shows an improvement in the Business Activity index.
Latest data on the health of the London private sector provided further evidence of difficult operating conditions for companies operating in the capital. The RBS (LON:RBS) and Markit Economics Purchasing Managers Index or PMI, as it is more commonly called, is a composite measure of a range of industrial indicators in the UK economy.The latest report on London shows that although falling at a markedly slower rate than in December, activity continued to decline at a historically strong pace in line with a steep reduction of incoming new orders. Jobs were cut at an accelerated and survey record pace, while companies saw profitability come under further pressure as output charges fell sharply. Concurrent falls in activity and new orders The start of 2009 saw output and incoming new business continuing to fall, albeit at slower rates than in the previous month and weaker than their respective UK averages. The improvement in the headline Business Activity Index since December was actually fairly marked (from 42.7 to 45.5), although it remained at a historically low level. The decline in incoming new orders was again steep, and broad based across the manufacturing and service sectors. Panellists commented on a difficult trading environment, and that budget cutbacks and a lack of confidence had undermined client spending. Spare capacity again signalled record contraction of employment London private sector companies signalled a sixteenth successive monthly contraction of work outstanding during January, with the rate of decline again steep. There were reports that a lack of incoming new business had facilitated the latest reduction in backlogs. Spare capacity in the capital’s private sector economy, as suggested by the latest backlogs data, led in some cases to job cuts. Poor trading conditions both at the present time and expected over the coming months also led to the survey record contraction in jobs. |
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