Posted by John North, Partner
‘The economic outlook for London’ by John North
The latest report by Oxford Economics on the economic outlook for London shows:
- London is expected to see a small increase (.4%) in GVA (Gross Value Added) during 2010 after a difficult 2009 where they estimate the region saw a fall in GVA of almost 5%.
- The Construction sector is expected to increase 7% in 2010 as some Olympic effects feed through and house building picks up.
- The employment situation is better with “only” a 2% reduction (almost 100,000 jobs) in 2009 – with the financial services sector losing 4% of jobs and the closely related business services sector (including real estate, renting and insurance) experiencing a 3.8% fall in employment. A further 20,000 job losses (-.4%) are forecast for London in 2010.
- The second half of 2009 saw UK house prices rising strongly (the Department for Communities and Local Government figures show that London house prices rose 6.1% in 2009 Q3) although in recent months (2.3% in 2009 Q4) the market has cooled somewhat. London has been a driving force behind the upturn in prices.
- Research on commercial property from GVA Grimley shows that prime rents fell 25% during 2009 across Central London with prime Mayfair rents experiencing a fall of 37%.
- Of all the UK regions, London has the most upside risks attached to its forecast. From 2011 onwards they expect the capital to perform significantly better than the UK average.
The full report is available here.
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