Growth in the UK economy should not mask the levels of support that Coventry and Warwickshire businesses need to overcome the effects of the Coronavirus pandemic, a regional business leader has warned.
The Office for National Statistics’ GDP figures for May 2020 revealed that the economy grew month-on-month by 1.8 per cent, driven by sectors that were some of the first to emerge from the lockdown, such as house building and manufacturing - followed by retail which experienced record sales online.
However, GDP fell by 19.1 per cent in the three months to May 2020, following falls in both the three months to March and the three months to April 2020.
Louise Bennett, chief executive of the Coventry and Warwickshire Chamber of Commerce, said: “While it is encouraging to see sectors such as construction and manufacturing - which are key to our region - showing glimpses of a recovery, we are nowhere near out of the woods yet.
“Businesses are operating in a vacuum of uncertainty - triggered by both the UK’s impending exit from the EU on 31 December, as well as the recovery from the Coronavirus pandemic - which is why it’s important that the unprecedented levels of financial support from the government should not grind to a halt.
“Sadly, there will inevitably be some redundancies from businesses in the region like every other across the country as some elements of government support winds down, but equally some firms we have spoken to across Coventry and Warwickshire within the warehouse and administration sectors are anticipating recruitment drives in the near future.
“We are also at a stage now where businesses are in the middle of forecasting what a post-Brexit environment will look like in terms of costs associated with moving goods across the UK/EU border, as well as the process to follow for recruiting overseas workers.
“We have started to gain greater clarity on these issues this month, which will enable firms to plan ahead with a greater level of confidence and we will be working with businesses to raise any concerns they have with MPs.”
Suren Thiru, Head of Economics at the British Chambers of Commerce, said:
“The latest data confirms there was a modest rally in monthly UK GDP growth in May as restrictions started to ease. However, coming after unprecedented contractions in the previous two months, it does little to alter the UK’s historically downbeat growth trajectory.
“The pick-up in output in May is more likely to reflect the partial release of pent-up demand as restrictions began to loosen, rather than evidence of a genuine recovery. While UK economic output may grow further in the short term as restrictions ease, this may dissipate as the economic scarring caused by the pandemic starts to bite, particularly as government support winds down.
“Although some of the individual measures announced in the Summer Statement were welcome, more significant fiscal stimulus is likely to be needed to help kickstart a sustained recovery. This should include new incentives for business investment and reducing the overall cost of employment through a cut in employer national insurance contributions.”