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East Midlands Chamber News

Chamber Comments On Latest GDP Figures

Commenting on the preliminary GDP figures for Q1 2011*, George Cowcher, Chief Executive of the Derbyshire and Nottinghamshire Chamber of Commerce, said: "Nationally, the economy bounced back somewhat in the first three months of the year after a disappointing end to 2010, something which the Chamber's latest Quarterly Economic Survey recently highlighted.

"Locally, the economy remains relatively robust against a backdrop of tax rises and contractions in public sector expenditure. UK manufacturing grew by 1.1% in Q1 and local manufacturers again reported increased sales and orders, plans to invest and improved confidence in future profits and turnover.

"Nationally, construction fell sharply for a second quarter in a row, but locally, domestic sales actually grew over the last three months - a positive indicator, given that this sector accounts for around 5.6% of all employment across the Derbyshire and Nottinghamshire LEP area. However, there are concerns going forward over future growth, orders, employment, investment levels in this sector, along with the impact of rising raw material costs.

"Concerns still remain about fuel prices, tax changes and inflation, which mean that people have less disposable income to spend, leading to further pressure to increase pay. To this end, the Bank of England should resist the urge to increase the base rate of interest until later in the year when the recovery is more stable.

"The measures announced in the Chancellor's recent Budget will also take a while to feed through into the economic cycle, so it is vital that Government perseveres with policies which support growth, whilst removing barriers that prevent businesses from investing, creating jobs and exporting."

* ONS: UK output increases by 0.5%.

** DNCC QES Q1 2011: 32% of firms are considering increasing staff pay during 2011, with 46% of firms ruling it out altogether and a further 22% undecided. Of the firms planning to award pay rises to staff, 31% expect it to be between 1%-2%, whilst 34% are considering increasing pay by 2%-2%. And 16% have said they plan to increase pay levels by more than 4% this year.

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