Member Article

Economic growth welcomed by the Chamber, but still a mixed picture

Business leaders in Coventry and Warwickshire have welcomed the latest economic growth figures – but say it is still a very mixed picture.

GDP – the measure of economic activity – grew by 0.2 per cent in the second quarter of 2023, including 0.5 per cent growth in June.

Corin Crane, chief executive of the Coventry and Warwickshire Chamber of Commerce, said: “Although we are still yet to see the full impact of the most recent interest rate rises, the growth in the UK economy shows just how resilient businesses have been in the face of so many challenges in recent years.

“I see it every single day when I go to meet amazing companies in Coventry and Warwickshire doing incredible things. “It’s a relief that we have, up to now, avoided a recession that many were forecasting but that doesn’t mean that we are out of the woods because it’s still a very mixed pictured. “The challenges around recruitment and skills haven’t gone away, overseas trade is not at a level it should be at, inflation is still much higher than any of us would like and interest rates have increased very quickly in recent months.

“So, for businesses and the economy to truly flourish, it needs some of those fundamentals to be fixed. “I’d urge companies which are looking to grow to come and talk to the team at the Chamber to see how we can support them with their ambitions.”

David Bharier, Head of Research at the British Chambers of Commerce, said: “Today’s first estimate for Q2, showing GDP grew by 0.2 per cent is better news than expected, but the UK economy remains in a precarious place. Businesses are continuing to face a worrying mix of high inflation, rising interest rates, a tight labour market, and global economic uncertainty.

“Today’s data is in line with our Quarterly Economic Forecast which expects just 0.3 per cent for the whole of 2023. While the UK remains on course to avoid a technical recession, small movements in one direction or the another won’t mean much for many firms facing the toughest trading conditions in years.

“Our latest Quarterly Economic Survey shows that most SMEs continue to report no improvement to investment, cash flow, or sales. Worryingly, 41 per cent of businesses are now concerned about the impact of rising interest rates. “UK businesses are very adaptable, but they are looking for clear direction from the government and the Bank of England, particularly on interest rate policy and a long-term plan to unlock investment.”

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