London’s labour market remains strong, with continued job growth and declining unemployment. National Insurance Number registrations increased, owing to more non-EU nationals coming to work in the capital. Although business activity was broadly steady, the take-up of office space dropped further.
The number of jobs in London grew by 1.3 per cent between Q4 2017 and Q4 2018. The UK as a whole saw a similar level of growth. Though the gap between capital and country has narrowed, the nature of jobs in each has diverged.
Whilst self-employed jobs declined by 6.3 per cent in Q4 2018 in the wider UK, they occupied the largest share of growth in London, increasing by 2.4 per cent in Q4 when compared with the previous year. Over the same period, employee jobs grew twice as fast in the UK than they did in the capital, increasing 2.6 per cent and 1.1 per cent respectively.
The rise in London’s self-employed workforce has led to a number of trends, such as a growth in shared office spaces across the capital. Third party mutual apps have flourished in response to a lack of sick pay and pension provision among self-employed workers. However, underlining the growth in self-employed jobs is a polarisation between low paid workers in the gig economy and London’s high earning freelancers.
London’s unemployment rate was 4.5 per cent in February 2019, continuing a pattern of steady decline and reflecting the capital’s increase in job numbers.
The gap between unemployment rates in London and the UK now stands at only 0.5 per cent, a significant reduction from the gap in previous decades.
Despite a declining unemployment rate and increasing job numbers, low pay remains an issue. A recent report by the Low Pay Commission found the proportion of Londoners being paid less than the minimum wage has been growing over the last three years
Central London commercial property data shows a slow start to the year, suggesting continued uncertainty around Britain’s departure from the EU is harming business confidence.
Take up of commercial property declined by 13.7 per cent in the first quarter of 2019 when compared to the previous year. Similarly, active demand – the total space currently sought by companies – declined by 13.9 per cent in the same period. In a bid to increase take up, some retail and office landlords have been enhancing offers to tenants, including rent-free periods.
Purchasing managers’ indices (PMIs) measure business activity by surveying companies on output, new orders, employment and prices; a score below 50 shows a fall in activity from one month to the next.
The Natwest/IHS Markit PMI shows declining business activity in London in the first two months of 2019. The Index stood at 48 in January 2019, though an upswing to 49.4 in February shows positive signs that expansion may not be far off.
National Insurance Number registrations
National Insurance Number registrations by people coming to London from overseas to work increased in the final quarter of 2018. There were more than 64,850 registrations in the final three months of 2018, a 5.6 per cent increase over the same period in the previous year.
Whilst these figures are not a measure of migration – they do not account for people who don’t register for national insurance numbers, or for people who leave – their reflection of the political climate is evident.
EU registrations have been declining since their peak in 2014, and this decline continued after the EU referendum in 2016. They continued to decline in Q4 2018, falling 6.3 per cent against the same period in 2017. However, this fall wasn’t as sharp as the fall between Q4 2016 to Q4 2017, which was more than 30 per cent. Meanwhile, registrations by non-EU nationals have been steadily increasing, albeit from a lower base, and saw a sharp rise of 33.6 per cent in Q4 2018 compared to the previous year.