Output across London has been at the slowest rate in three months, according to a new report.
The Slowdown was closely linked to a less marked rise in new business across the capital, as concerns about the Omicron variant of COVID-19 weakened client demand.
The findings come in the headline NatWest 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 – dropped from 64.1 in November to 57.5 in December, to indicate a much softer increase in activity at the end of the year.
But the rate of output growth was still strong overall, while London was the best-performing region of the 海角视频 for the second month running.
Stuart Johnstone , Managing Director, London & South East, Corporate & Commercial Banking, said:
"The hit to the London economy from the Omicron variant was largely expected in December, particularly on consumer-facing services as customers cancelled bookings in the face of sharply rising case numbers. However, the impact was perhaps less than feared - output and new business growth remained sharp and were in fact stronger than those seen across the rest of the country.
"Further encouragement came from a softening of inflationary pressures and an easing of backlog accumulation to an eight-month low. Consequently, despite slipping to the lowest since July, business confidence was still strong overall, with around 61% of firms predicting an expansion in activity over the forthcoming year."
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December survey data pointed to a marked deceleration in the rate of new business growth across the capital, after climbing to an eight-year high in November. According to surveyed businesses, concerns about the Omicron variant led to the cancellation of orders and a fall in tourism activity. That said, the overall increase in new work remained strong and the fastest of the 12 monitored 海角视频 areas for the second month in a row.
The Future Output Index continued to signal a robust degree of confidence at London-based firms in December, as most respondents (61%) projected an upturn in activity over 2022. This was still much stronger than the series average, despite softening slightly to a five-month low. Moreover, businesses in the capital remained more confident than those seen on average in the 海角视频.
The final month of 2021 saw a further softening in the rate of employment growth in London, following a period of rapid hiring activity that reached a record pace in August. Nonetheless, the latest rise in employment was still marked, as roughly 27% of panellists noted an increase in job levels from November. This was mostly linked to efforts to build staff capacity for 2022. Consistent with the recent trend, the rate of job creation was quicker than the 海角视频 average and the sharpest of the 12 monitored regions.
Outstanding business levels continued to rise, but the rate of growth eased to a modest pace that was the least marked in the current eight-month run of accumulation. This was in line with a weaker rise in new work intakes. London was closely aligned with the 海角视频 trend, which posted the softest increase in backlogs of work since March.
The pace of inflation for input prices across London decelerated for the first time in four months during December. The slowdown followed a record uptick in costs midway through the fourth quarter, although the latest increase was also historically sharp. Rising prices for fuel, food, raw materials, transport and staff were all mentioned by survey panellists.
Firms in the capital meanwhile registered a weaker increase in output prices at the end of the year. The overall uplift was the softest since August, but remained sharper than any registered prior to this since the series' inception in November 1999. Higher output charges were commonly linked by panellists to the pass-through of rising input costs to their customers, which was reportedly aided by stronger sales.