All that glisters is not gold; Often have you heard that told.
How come, it takes three successive quarters of contraction before we’re officially allowed to say it’s a recession, yet a measly 0.1% growth in one quarter is enough for the government to claim all its panic-efforts have worked and that the UK is out of the woods?
The construction industry knew it was in recession long before the official stamp was put upon the downturn. Just think back to the jobs bloodbath in housebuilders, manufacturers and, yes, merchants. Construction Skills reckons that overall construction industry job losses are 325,00 and will probably hit 400,000 by 2011.
How many jobs have been lost across the merchant industry in the last 18 months – 8,000, 10,000, 12,000? I lost count some time ago. And most industry forecasts believe it will easily be next year before construction is really back on its feet again.
Still, according to the dulcet tones of Joe Grice, chief economist at the Office of National Statistics, the economy grew by 0.1% in the last quarter of 2009, the first time it has done so since the first quarter of 2008.
Hmm. Whoop-de-doo. Or, as the wonderful BBC economics editor Stephanie Flanders, puts it – “a recovery, but not a statistically significant one”.
It might be that the growth is because the general public flocked to the high street to take advantage of the 2.5% VAT cut before it evaporated on January 1. In which case the figures for the first quarter of this year could be worse, if everyone spent in December what they would have spent in January.
Or, it might be because things actually are easing. Talking to merchants and manufacturers at the NBG lunch last week, it seems that things have been quietly getting better for a little while.
Obviously, the snowfalls earlier this month have meant that most companies started this year off on a lower footing than they might otherwise have done. But all this means, one particularly bullish merchant told me, is that everyone has to work a little bit harder at the beginning of the year but at least their efforts will mean we’re going in the right direction.
ONS statistics like this are often revised and usually upwards, so that meagre sounding 0.1% might actually be higher. Let’s hope that this actually happens as you can bet the farm on the fact that, come the election, whoever gets in, there isn’t going to be a mass of government spending to bolster things further.