Economy remains stagnant

Economy remains stagnant: BCC Quarterly Economic Survey

  • Q3 results slightly worse than the previous quarter – UK economic performance remains weak and inadequate
  • Business confidence and investment falls
  • Recovery in exports has weakened
  • Domestic orders are weak and far below pre-recession levels
  • Firms less confident in taking on staff
  • Companies reported cashflow problems
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Recession continues Q2 2012

Gross Domestic Product, Preliminary Estimate, Q2 2012: ONS

  • GDP decreased by 0.7 per cent in Q2 2012 (revised to 0.5 per cent decrease on 24 Aug 2012) compared with Q1 2012
  • This follows falls of 0.3 per cent in Q1 and 0.4 per cent in Q4 2011
  • GDP in volume terms decreased by 0.8 per cent in Q2 2012, when compared with Q2 2011

John Cridland, CBI Director-General, said:

“When I talk to businesses on the ground, however, the overwhelming view is that right now the economy is flat rather than negative, and there is potential for Britain to get back into growth later in the year.”

I don’t agree with the CBI that often but it does seem that, once trade flattens out rather than falling, smaller businesses that I come in contact with are more positive about the future.

British Chambers are also not as gloomy as might be expected – although the want government action.  John Longworth, Director General of the British Chambers of Commerce, said:

“Many of our members are continuing with guarded optimism, but the government must ensure confidence is not damaged further”

IoD comments.

Economic growth is “still too slow”

Quarterly Economic Survey – Q2 2012: BCC

  • Domestic orders are weak: Balances measuring domestic activity have shown little net overall change, and while they are in positive territory suggesting growth, domestic activity is not yet back to levels seen before the recession in 2007
  • Exporting activity has increased: a further rise in exporting activity among both service sector and manufacturing firms
  • Confidence among businesses remains lower than before the recession in 2007
  • Fewer firms are looking to raise prices
  • 37% of all firms reported inflation as a concern.
  • Compared to Q1, the number of manufacturers concerned with exchange rates rose sharply from 38% to 52%

Gross Domestic Product: Recession

Gross Domestic Product: Preliminary Estimate, Q1 2012: ONS

  • The chained volume measure of GDP decreased by 0.2 per cent in Q1 2012
  • Output of the production industries decreased by 0.4 per cent in Q1 2012, following a decrease of 1.3 per cent in the previous quarter
  • Construction sector output decreased by 3.0 per cent in Q1 2012, following a decrease of 0.2 per cent in the previous quarter
  • Output of the service industries increased by 0.1 per cent in Q1 2012, following a decrease of 0.1 per cent in the previous quarter
  • GDP in volume terms is flat in Q1 2012, when compared with Q1 2011

Economic Review – April 2012:  ONS

GDP and the Labour Market – 2012 Q1: ONS

TUC on new GDP figures

Commenting on the news that the UK economy is back in recession, TUC General Secretary Brendan Barber said:

‘This is worse than expected. There has been no growth over the last year, and the economy is 0.5 per cent smaller than six months ago.”

Double dip recession announcement devastating but not surprising – TUC

CBI surprised by latest official GDP figures

GDP figure paints unduly pessimistic view of economy – British Chamber of Commerce

Negative GDP figure could affect sentiment among businesses – British Chamber of Commerce

Double dip recessiona blow to consumer mood – BRC

Confidence takes a battering – IoD

UK economy in double-dip recession: BBC

The UK economy has returned to recession, after shrinking by 0.2% in the first three months of 2012.