The British economy finally has some really good news to shout about! The Office for National Statistics released Q3 figures this morning, and they revealed that the British economy exited recession with 1% in the three months from July to September! Good news!
Here’s the really positive stuff; we’ve now come out of the longest recession since the 1950’s. Last quarter was the strongest quarter of growth since the third quarter of 2007, that’s exactly 5 years! Q3 growth was expected to be 0.7%, so came in better than expected.
I think it is safe to say that we are all glad to hear some good news coming out of the media for a change. A lot of us, including myself, blame the media for creating an over-negative spin on the whole thing. When you constantly pump bad news into people’s homes and businesses, it’s going to create a negative spiral that is hard to shake off. Luckily, the gritty British public have shaken off that negativity and helped return the economy to growth for the first time in three quarters.
We do have to make note of a couple of things though. The recent Olympics have had an impact. The ONS estimated that the Games brought an extra +0.2% boost to the economy. The GDP figures were also massaged in comparison with the Q2, because the second quarter had an extra public holiday as part of the Diamond Jubilee celebrations in in June. There are also two re-estimations to come in the coming weeks to these figures. But, if you take out both those factors, the economy still grew, which is the important thing.
So here’s the long term thinking; the economy is now at the size it was in 2008. So that’s four years of lost progress. We need the construction sector to really start picking up now. In Q3 of this years it shrank again by another 2.5%. If our economy is to sustain decent growth, the construction sector needs to play it’s part. And it is sustainability that is the key here. Manufacturers are taking a surprisingly negative view on today’s figures and are saying that they expect to return back to negative growth and that this quarter is a one off! I disagree with this stance, but I do want to reiterate that we need to use this last quarter as a platform to enhance growth in the economy in the coming quarters.
So, lets take this good news, build on it, promote it to everyone who will listen and use it as a platform to make further progress!