24/04/2012

Commenting ahead of the first estimate for GDP in Q1 2012, due to be published by the ONS tomorrow, John Longworth, Director General of the British Chambers of Commerce (BCC), said:

"Most recent business surveys signal a return to positive, albeit modest, GDP growth in the first quarter, after the 0.3% decline recorded by the ONS for the fourth quarter of last year. However, some analysts are concerned that the ONS may report a small decline in GDP for the first quarter, mainly due to falls in construction output figures, which are notoriously volatile and subject to large revisions. The surprising fall in manufacturing output in February reinforced these concerns, although the figures may have been influenced by the seasonal adjustment used by the ONS this year when February had 29 days. The unadjusted figures show a manufacturing rise, both on a monthly and annual basis, which raises questions about the ONS estimates, and leads us to believe that the initial figures could be revised.

“While arguing over statistical issues may seem trivial, a negative Q1 figure, however small, will mean the economy has entered a technical recession and this could affect the sentiment among businesses. We still think that a recession is unlikely, and believe that business surveys give a more reliable picture of the underlying situation. The debate around a technical recession deflects attention away from the real issues facing the economy, which relate to a prolonged period of unduly low growth and the urgent need for stronger efforts to help businesses drive recovery.”

Ends

 Notes to editors:

The British Chambers of Commerce (BCC) is the national voice of local business.

The BCC sits at the heart of a powerful nationwide network of Accredited Chambers of Commerce, serving over 100,000 businesses across the UK, which employ over five million people. 

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