The UK economy shrank in Q4 2012 and it was initially suggested that the nation would fall back into recession in Q1 2013, but in the end, revised figures showed growth of 0.4% for the quarter. Indeed, review by the Office of National Statistics determined that the country avoided the “double dip” recession between Q4 2011 and Q1 2012, revising the Q1 2012 figure up to “flat” (0% growth) from a contraction of 0.1%. However, they also concluded that the extent of the 2008/9 downturn was worse than previously thought, hitting output by 7.2%. In common with almost all other developed economies, indicators within the UK have been contradictory, leading to a chopping and changing of growth forecasts.
The most recent ray of sunshine for UK PLC comes from the assessment of the economy from the British Chambers of Commerce (BCC) in the shape of their latest quarterly survey. The survey involves a questionnaire sent to 7400 UK businesses, making it the UK’s largest such survey. It found better prospects for employment with 26% of respondents expecting to take on staff within the next three months – the strongest level seen since before the Global Financial Crisis in 2007. Within manufacturing, the new hirings figure was 29% which was the highest level ever seen for a BCC survey since they started in 1989. Sales and orders within the service sector were at their fastest pace since 2007 whilst manufacturing sales and orders enjoyed their best performance since the 1990s.
BCC expects to raise its growth forecast for 2014 on the strength of the data to between 0.9 and 1% - the historic growth rate average for the UK since 1955 has averaged 0.6%.
On the other hand, a British Retail Consortium survey showed that the pace of retail sales slowed in September, following on from a slower pace in August. Like-for-like sales in September were up by 0.7%, but that was less than half of the rate seen in the previous two months.
All of this underlines the fact that a patchy recovery is underway in the UK as it is in most other developed economies. Survey figures are given as percentage change which flatters real underlying data when it comes off such a low base.