Firms show resilience despite slight fall in GDP - Chamber

The UK economy shrank by 1.5 per cent in the first quarter of 2021 against the backdrop of a lengthy lockdown, according to figures released today.

The latest Office for National Statistics data covers the period when a surge in Covid-19 cases resulted in renewed restrictions, including the closure of schools, retail and hospitality.

The ONS says these closures dragged down economic growth during Q1.

The economy is now 8.7 per cent smaller than its pre-pandemic level.

But there was a resurgence in March when the economy grew by 2.1 per cent, as schools returned and retail spending was on the rise.

The impact on the economy was less severe than during the first lockdown and Greater Birmingham Chambers of Commerce say this is testament to the resilience of businesses.

Henrietta Brealey (pictured), chief executive of the GBCC, said: “The first quarter drop in output was expected given the raft of restrictions introduced by the Government in a bid to stem the flow of the virus at the start of the year along with the impact of Brexit on businesses up and down the country.

“However, the impact on the economy has been much less pronounced than we saw at the start of the pandemic which is a testament to the resilient nature of businesses as many learnt to adapt to the latest measures.

“A strong recovery in March points to a strong second quarter as restrictions ease, the vaccine roll out continues at a remarkable pace and hopefully a upsurge of consumer spending will follow.

“We start the surveying for our latest Quarterly Business Report next week which will be track local sentiment and explore the prospects of an economic recovery over the next few months in Greater Birmingham.

“There 's much to feel positive about but the long term consequences of the pandemic are yet to be fully understood. The Bank of England have forecast sluggish growth in the long term.

"We will continue to bang the drum for local businesses on areas needing further Government interventions as set out in our Keep Business Moving II report."

Read our Keep Business Moving II report here.