Partner Article

Region welcomes GDP growth

NORTH EAST business leaders have urged businesses to focus on the growth of the economy after surprise figures yesterday revealed an unexpected rise in the UK’s GDP.

The UK’s economy grew at 0.8% between July and September, official figures show, suggesting the economy is recovering faster than expected.

It follows 1.2% growth in the second quarter of the year, and is double the 0.4% expected by analysts.

The North East Chamber of Commerce (NECC), which represents more than 4,000 companies, said that growth of 0.8% in the third quarter of 2010 was a solid.

Andrew Sugden, NECC director of membership and policy, said: “Coming off the back of a stellar performance by businesses in April to June this year, which was perhaps inevitable after such a deep recession.

“This quarter was always likely to show more modest growth but 0.8% is comfortably above the long-term average.

“We must recognise that this data still represents growth in the economy despite falling short of the second quarter of 2010. This is solid growth and it is crucial that we don’t allow confidence to evaporate by talking the economy down.”

Commenting on the GDP data, Simon Rubinsohn, RICS Chief Economist said the new findings provided another positive surprise and hailed the construction sector for its contribution to the recovery.

“Over the past two quarters construction output has been responsible for not far short of half of the increase in GDP.

“Despite this, we are not entirely convinced of the strength of the recovery in the sector. Other official data relating to construction is sending more mixed signals.

“Housing starts remain way down on previous highs, meanwhile the construction orders numbers have fallen away sharply. In addition, most sentiment surveys of the sector including the RICS and CIPS reports are certainly not picking up such a robust performance.”

This was posted in Bdaily's Members' News section by Ruth Mitchell .