Revised GDP figures point to continued stagnation

27th February 2013

Quarterly GDP growth in Q4 2012, unrevised at -0.

3% Whole year 2012 GDP revised up from nil to 0.2% Manufacturing output in Q4 revised up from -1.5% to -1.3% Household consumption rose 0.2% on the quarter, but investment and exports fell  Commenting on the GDP second estimate for Q4 2012, published today by the ONS, John Longworth, Director General of the British Chambers of Commerce (BCC) said: -With the latest estimate of GDP unrevised at -0.3%, the economic picture for the UK remains weak. These figures, coupled with the recent downgrade of the UK's credit rating, confirm that action must be taken quickly to get the economy growing again. -The Chancellor should seize the opportunity in next month's Budget to be radical, and introduce measures that create an environment of enterprise, stimulate export growth, kick-start infrastructure projects and create a structure of business finance which supports growing companies. Above all, these measures should create confidence. Our own research shows that firms across Britain believe they can drive growth this year, but they can't do it alone. The government must be bold and do all it can to boost confidence so that businesses can create jobs, wealth and ultimately long-term growth. David Kern, Chief Economist at the BCC, added: -The quarterly GDP estimate was unchanged at -0.3%, but due to upward revisions for previous quarters, we now get a slightly more positive picture for the full year. In 2012 as a whole, the economy grew very slightly, by 0.2%, and excluding oil and gas, average 2012 growth was 0.4%. These revisions confirm our view that original ONS estimates have been too gloomy. There is no room for complacency though, as the broad picture is one of stagnation, and a detailed analysis of the Q4 figures highlight areas of concern. While consumer spending and government consumption recorded increases in Q4, there were relatively large falls in business investment and exports. -These figures reinforce the need for the government to focus its forthcoming Budget on an effective growth strategy, without adopting an unjustifiable, pessimistic view of the UK economy. Our own surveys show that business confidence remains robust, and although firms are adjusting to the reality of lower growth prospects, they are trying to do everything possible to drive the economy.