London is the powerhouse of the UK economy, responsible for a quarter of the country’s total output and generating around 40 per cent of Treasury tax receipts.
Within the capital, however, there are considerable differences in economic performance. A new report from the London Chamber of Commerce and Industry (LCCI) hopes to draw attention to some of these differences so that policy can be effectively targeted at under-performing areas.
“The capital is so economically diverse that London-wide data and analysis sometimes hide more than they show,” Mayor Jason Perry, London Councils’ Executive Member for Business, Economy and Culture, said.
Here are five graphs, taken from the report, which explain London’s economy.
Employment is concentrated in inner London areas and in some outer London such as Heathrow Villages
The five boroughs with the highest numbers of jobs in 2021 were all in inner London – Westminster, Camden, Tower Hamlets, Southwark and Islington.
The boroughs with the sixth and seventh highest number of jobs in 2021 were the outer London boroughs of Hillingdon and Hounslow. Heathrow airport has been the key driver of both boroughs’ economies.
Inactivity rates vary a lot between boroughs
Kensington and Chelsea had the highest levels of economic inactivity of all London boroughs, with 28 per cent of 16-64 year-olds not active in the labour market in 2022.
Other boroughs with particularly high levels of inactivity are Westminster (27 per cent), Camden (25 per cent) and Waltham Forest (25 per cent).
The borough with the lowest level of inactivity is Wandsworth, with only nine per cent of 16-64 year-olds economically inactive. This likely reflects a much smaller student population in Wandsworth as well as slightly lower levels of long-term sickness.
Only four boroughs have higher labour productivity levels than London’s average
In 2021, Tower Hamlets was the most productive borough with £66.50 generated per hour worked. Hounslow was the second most productive borough (£57.80 per hour worked).
Lewisham and Haringey were the least productive, with £28 and £30 generated per hour worked.
Labour intensity by sector
In 2021, the real estate sector was the biggest contributor to London’s economy, generating almost 17 per cent of London’s total gross value added (GVA), excluding the City of London.
The information and communications sector, the professional, scientific and technical sector and the finance and insurance sector all generated around 11/12 per cent.
These industries produced more than half of the total GVA generated in the capital, they only contributed 28 per cent of London’s total employment. The activities with the largest number of jobs were wholesale and retail trade, professional, scientific and technical, human health and social work
Manufacturing activities are concentrated in a few boroughs
Employment in manufacturing is highly concentrated within Ealing, Barking and Dagenham, Brent and Bexley.
Boroughs in central and south London have the lowest concentration of manufacturing employment.