GDP picks up as burst of consumer spending on the horizon - Chamber

A burst of consumer spending could be on the horizon, as coronavirus restrictions ease across the country, business leaders have said in reaction to new GDP figures released today.

According to figures from the Office for National Statistics (ONS), GDP grew marginally by 0.4 per cent in February, when the country was in the midst of strict coronavirus restrictions.

Encouragingly, the services, production, manufacturing and construction sectors all grew between 0.2 and 1.6 per cent in February.

Despite optimistic figures, GDP is still 7.8 per cent below levels recorded in February 2020.

The ONS also released new figures on UK exports and imports in January today, which revealed that exports of goods to the EU, excluding non-monetary gold and other precious metals, picked up in February; increasing by £3.7 billion, by 46.6 per cent, after a record fall of £5.7 billion in January.

The increases in exports to the EU in February 2021 were driven by machinery and transport equipment and chemicals, particularly cars and medicinal and pharmaceutical products.

Imports of goods from the EU, excluding non-monetary gold and other precious metals, showed a weaker increase of £1.2 billion (7.3 per cent) in February 2021 after a record fall of £6.7 billion, a drop of 29.7 per cent, in January.

Raj Kandola (pictured), head of policy at Greater Birmingham Chambers of Commerce, commented: “Slowly but surely we are starting to see the economy pick up pace as national restrictions begin to ease and the vaccine rollout continues to offer light at the end of the tunnel.

“It was no surprise to see that services sector output is still someway short of pre-pandemic levels - a trend we saw reflected locally in our latest Quarterly Business Report.

“As children returned to school throughout March and with a number of firms opening up this week, we should hopefully see a burst of consumer spending driving much higher output over the next few months - however, as we 've pointed out in our latest Keep Business Moving report, there is still much more the Government could be doing to help those businesses that have been struggling for almost a year.

“Exports to the European Union also partially rebounded in February after their record fall at the start of the year but are still way short of the levels of output we saw prior to Brexit - which hints at much more than simple teething issues as businesses adapt to the new landscape.

“As always our International team is on hand to help businesses adapt to the new trading arrangements and continues to provide firms with Brexit related support and services - full details can be found on our website ”

To read the Chamber 's Keep Business Moving II report, click here

To read the Chamber 's latest Quarterly Business Report, click here

For Brexit guidance and advice, click here