Results posted by the British Chamber of Commerce (BCC) indicate that business confidence has reached its highest level in 6 years. This, in turn, has led the BCC to up its forecast for GDP growth to 0.6 per cent in the second quarter.
According to the BCC, this boost in business confidence is largely due to an upturn in export sales, which have grown by the fastest rate since the survey was initially launched in 1989.
While this is partially due to the fact that the bleak domestic demand during the recession forced many businesses to look elsewhere for customers, it nevertheless stands Britain in very good stead on the international business platform.
Chief economist at the BCC, David Kern, remains optimistic that these signs indicate a future of stability in the UK, saying that; “The UK upturn is slowly strengthening.”
However, BCC director general John Longworth warned against complacency, reminding businesses that “false dawns” of recovery can be choked off – mainly when banks are unwilling to lend; an issue which many SMEs are currently facing.
Former chairman of Pizza Express, Luke Johnson, has taken Mr Longworth’s warnings on board but believes that the recent consistent results prove that the worst is over for the economy.
He says; “I think the consistency of all the surveys and statistics coming through over the last six to 12 months is pretty compelling.
“I sense a rising tide of animal spirits – of course there are always threats and challenges ahead, but sentiment is now much better and this is now a real recovery.”
Bank lending now remains one of the only major obstacles to be traversed for SMEs. However, with RBS set to launch a review of its lending policy this summer, it is hoped that small firms will soon have access to the finances required for solid growth.
Hugh Pym, BBC News chief economics correspondent, believes that more positive news is soon to follow when the results for the second quarter are released.
He says; “Two swallows don’t make a summer and two positive economic indicators don’t guarantee a sustainable recovery.
“But the upbeat noises from the BCC and construction purchasing managers today reinforce the assumption amongst many economists that growth picked up in the second quarter of this year.”
Do you think that the good news coming from the construction, retail and leisure sectors provides a platform from which recovery can be built in earnest, or do you fear that the summer season has brought another “false dawn” which will fade as autumn sets in?
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