Revised GDP figures point to continued low economic growth

23rd May 2013

Quarterly GDP growth in Q1 2013, unrevised at +0.

3% Services was the main driver, with quarterly growth of +0.6% Business investment fell 0.4% on the quarter Exports of goods and services volumes fell 0.8% on the quarter, while imports fell by 0.5%  Commenting on the GDP second estimate for Q1 2013, published today by the ONS, John Longworth, Director General of the British Chambers of Commerce (BCC) said: -Any growth, however small, is good news and will boost the confidence of many firms across the UK. As things stand, the economy is likely to remain subdued for some time, although we do expect slow and steady growth to continue throughout 2013. -But realistically, slow growth is not good enough and is little comfort when looking at the bigger economic picture. Growth is still unacceptably weak and the economy is performing well below its potential. We have the opportunity to do so much better, but only if the government steps up to give businesses the right conditions for an enterprise friendly environment to get the economy moving. The Chancellor should seize the opportunity in next month's Spending Review to significantly shift priorities within his fiscal plan. We urge the Chancellor to seriously consider allocating more current spending towards capital investment and towards measures that would give firms across Britain the right tools they need to grow. He must ensure that the Treasury and the Bank of England do much more to lever private investment in infrastructure by providing guarantees to make it more attractive to investors. Bold steps to improve access to finance and to review the business tax regime are also crucial. Only then will we stand a chance of leading Britain towards a meaningful and sustainable economic recovery. David Kern, Chief Economist at the BCC, added:  -Although GDP growth was unrevised at 0.3%, the picture painted by the new figures is concerning. Consumer spending increased by a mere 0.1%, business investment fell, and the trade balance in volume terms worsened as exports fell more than imports. One of the main sources of Q1 growth comes from inventories, a volatile item. -While it is pleasing that the UK economy remains in positive territory at a time when our trading partners in the eurozone are still in decline, it is also clear that the economy is facing major challenges. While continuing with the deficit cutting plan, the Chancellor must also shift priorities towards measures such as infrastructure investment, to enhance the economy's medium-term growth potential. This will help businesses create jobs and growth.