Posted by John North, Partner
‘Economic Outlook for London’ by John North
The City of London Corporation recently released its latest update on the economic outlook for London.
The report is available for anyone to download and the key points included:
London is expected to see a small increase in GVA (Gross Value Added) of around .4% in 2010 (estimates are that the region saw a fall of GVA of almost 5% in 2009).
Further growth up to 3.1% in 2011.
The construction sector is expected to make a strong bounce back with a GVA increase of 7% in 2010 as some Olympic effects feed throug and house building picks up.
There was ‘only’ a 2% reduction (almost 100,000 jobs) in employment in 2009
However, the financial services sector lost 4%, the business services sector (real esate, rent and insurance)saw a 3.8% fall and London’s shrinking manufacturing sector fell 8.5%.
A further 20,000 job losses are forecast for 2010.
The latest Global Financial Centres report has London level pegging with New York when it comes to competitiveness in financial services. But there are fears of a regulatory structure being imposed that limits the freedom of financial institutions and higher levels of corporate and personal tax.
The second half of 2009 saw UK house prices rising strongly but the market has cooled since then. London continues to perform better than the US average according to major lenders and teh Department for Communities and Local Government. House prices in London forecast to increase by 2.1% in 2010 with a slowdown in 2011.
Overall though, the report was positive – from 2011 onwards London is expected to perform significantly better than the UK average because London’s performance has been strongly linked to global fortunes and this relationship is expected to hold.
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