FSB optimistic despite unexpected slump in GDP growth » SMEInsider

FSB optimistic despite unexpected slump in GDP growth

The national chairman of the Federation of Small Businesses (FSB) continues to be optimistic regarding the growth of SMEs, despite national GDP growth decreasing in the first quarter of the year.

A preliminary estimate from the Office of National Statistics (ONS) shows that GDP growth is much weaker than economists had predicted, with the quarterly figure shrinking to 0.3 per cent instead of an estimated 0.5 per cent. GDP growth stood at 0.6% in the fourth quarter of 2014.

In spite of the reduction in the country’s national growth, the FSB continues to be hopeful.

‘‘The news that GDP growth remains positive is welcome – although the slowdown shows how we cannot afford to be complacent about the recovery. Despite these figures suggesting growth has cooled in the first quarter of the year, our members continue to tell us they are optimistic, with many expecting to grow and take on new staff in the first half of 2015,’’ said John Allan, National Chairman of the Federation of Small Businesses.

Although the ONS statistics show that the UK economy may be on the downturn, it is not actually the case. The UK economy is actually 4% above its pre-crisis peak and 8.4% larger than 2010 when the coalition Government took office.

‘‘These figures underline once again the importance that government works with businesses to ensure the conditions are right for their expansion and job creation plans. That should be achieved by keeping interest rates and inflation low, and constantly focusing on pro enterprise policies,’’ continued Allan.

The ONS report shows that construction is one area that suffered considerably during the first economic quarter. Construction output has decreased by 1.6 per cent, making this the second consecutive quarter in which construction output has fallen. SME Insider yesterday reported that there is currently a severe lack of bricklayers in the UK.