The UK has now officially reached the end of the W shaped - double dip - recession. Feared for so long and lengthened by the one-off impact of the Jubilee. Officially the UK grew by 1% in the quarter July to September, the fastest growth for five years.
Actually there were special considerations for this growth spurt, mainly the Olympics and the 'catch-up' from the previous quarter, so don't get too excited yet.
The headline figure is, as always, hiding a lot of detail. Look at the BBC economy page for that. It should be noted that the construction sector really is the problem area at present.
Construction continues to shrink and is making a really big impact on the figures. We should be worried about this. Not only does construction employ a lot of people and use lots of locally produced resources, but it is also a 'leading sector' in recoveries. We would expect construction to turn up before we saw a sustained rise in Real GDP.
The other point that might be worth noting is that the economy shrank by 6.4% in the first 'dip' and so far only half of that has been recovered even counting the last quarters growth.
Below is an article by The Guardian's Larry Elliott. You could not find a more miserable and biased economic commentator and he puts the latest recovery in the worst light he can. I'm surprised he wasn't the first to name the next stage as the triple dip or VW shaped recession. Glad I got in first!
What a fascinating article by that man!
ReplyDeleteIt seems that if he is trying to plunge the economy into a triple dip recession through declining confidence, he might just succeed with the way he's writing. He's all doom and gloom compared with the real world, somewhat out of touch, what a downer...
The reality is that a lot of that growth is down to the one off events mentioned by everyone however there is still some genuine progress made by the economy in very recent times with unemployment and inflation falling further. In fact confidence is up, I recently saw a poll asking if the economy was now recovering and over half said that it was. The mood is changing, we're adapting to austerity and the Private sector is picking up the employment from the Public sector. Indeed I went to Dorchester recently and I noticed adverts in almost every shop window on the high street under the title of 'RECRUITING'. There is a wind of change in the country at the moment, however there are things that can stop the change. Spain announced that one in four of the workforce are now without a job and I have heard from my relatives out there that even those with a job aren't being paid on time. Hollande is ruining the French economy and Mitt Romney will most likely ruin Obama's progress in the USA (they have also expanded 2 percent in the previous quarter), all of which could help derail us. We must weather the storm for longer otherwise we will be entering a "People's car" style recession which would be difficult for us to cope with. However in 2010 and 2011 the fourth quarter did see a fall in output but only because of the weather, hopefully that will be sorted for this winter. But if the economy does contract in the fourth quarter then that can be somewhat expected and we shouldn't see it as a failing of this government or what its doing. Hopefully 'the good news will keep coming'.
With regards to the article, how can some of our lost growth be lost for good? Surely we will just grow back afterwards greater than that?
Three comments in a day! All worthwhile as well. Hope the fish are thriving.
ReplyDelete