Business leaders have called for a renewed push on manufacturing after crushing new figures revealed the UK is now in the grip of the longest double-dip recession since the 1950s.
The UK’s recovery hopes were dealt a further blow after shock figures showed the economy shrank by 0.7 per cent – far more than the 0.2 per cent predicted – between April and June, on the back of dire construction and manufacturing output.
It was the sharpest decline in GDP since the height of the financial crisis three years ago and far worse than predicted at the turn of the year.
John Rider, regional chairman of the Institute of Directors, said the GDP figures were “undeniably poor”.
But he insisted the West Midlands was doing better than the statistics suggested.
He said it was important to get behind successes like Jaguar Land Rover and the wider automotive supply industry.
He said: “We have just had the brilliant news that Jaguar Land Rover is to create another 1,100 jobs at Castle Bromwich, and this is on top of previous major announcements from the company such as the new engine plant earmarked for the i54 site near Wolverhampton.
“Automotive has always been the bedrock of this region and it is thriving with much of the product going for export.
“We must continue to capitalise on this.
‘‘And to that extent it does not feel like a recession in the West Midlands.”
The decline in GDP between April and June was at least in part down to one-off factors or, as the ONS dubs them, “special events”.
Statisticians have not been able to put a number on the impact of the additional bank holiday granted for the Queen’s Diamond Jubilee – but have admitted it will be a “significant” hit.
And then there was the Great British summer.
Torrential downpours throughout April and June dampened demand for clothing, food and leisure activities, while the nation’s builders struggled to get out to work.
This was underlined in the construction sector figures, which showed a mammoth 5.2 per cent decline as the dismal weather stifled projects.
Chris Williamson, economist at financial information services firm Markit, said: “Some of the overall decline – perhaps as much as 0.5 per cent – can be attributed to the additional public holiday for the Queen’s Jubilee, while wet and cold weather also hit high street sales and other outdoor-related services activity, which suggest the weakness may only be temporary.”
But regardless of the “special events”, analysts, and even the Chancellor, have warned that the underlying picture is difficult.
In reaction to the most recent growth figures, George Osborne said the “country has deep-rooted economic problems” and did not offer the weather or Jubilee as an excuse.