Member Article

Slowdown in growth is a sign of pressure on local businesses

Business leaders in Coventry and Warwickshire say a slowdown in economic growth highlights the pressure firms are under. GDP – the measure of economic output – grew by 0.1 per cent in February compared to 0.8 per cent in January. Sean Rose, head of policy at the Coventry and Warwickshire Chamber of Commerce, said businesses across the patch were facing a range of issues that are holding back stronger growth.

He said: “Businesses were hopeful that the beginning of this year would see a return to stronger growth as Covid-19 restrictions were being lifted. “But, due to a range of circumstances, companies are having to deal with a whole host of factors that are making it more difficult for them to grow. “The cost of doing business has rocketed and we heard from the Bank of England recently that inflation is yet to peak.

“The latest GDP figures are a sign of the pressure that companies are under and we’d urge firms to make sure they are in touch with the Chamber to see what help they can get to support their growth.”

Suren Thiru, Head of Economics at the British Chambers of Commerce (BCC), said: “While economic output continued to rebound in February, the significant slowdown in growth indicates that the UK economy was losing steam even before the impact of Russia’s invasion of Ukraine.

“Tourism-related industries and accommodation services recorded the strongest improvements in the month at the end of Plan B restrictions, and reduced concerns over Omicron, supported activity. However, this was mostly offset by a significant drop in NHS Test and Trace services and vaccine activity as well as declines in industrial and construction output.

“February’s slowdown is likely to be the start of a prolonged period of considerably weaker growth as rising inflation, surging energy bills and higher taxes increasingly damages key drivers of UK output, including consumer spending and business investment.

“Weakening health sector output following the end of free Covid testing and mass vaccinations, is also set to weigh on UK GDP in the near term.

“The Government must provide urgent financial support, through the expansion of the energy bills rebate scheme, to include small firms and energy intensive businesses, and an SME energy price cap to protect smaller firms from some of the price increases.”

This was posted in Bdaily's Members' News section by Matt Joyce .