Despite the current ‘cloudy’ outlook for the UK economy, economists at business advisers PwC anticipate brighter conditions for the year ahead, backed by a rise in regional employment over the last quarter to 69.3%.
GDP growth in the region is expected to reach 1.8% next year – the highest growth outside Greater London and the South East where the recovery is strongest.
Nationally, consumer spending is expected to rise from around 0.7% to 1.3%, easing the squeeze on disposable incomes. A gradual rise in business investment in response to consumer demand is also expected, as well as some improvement in global growth to boost UK exports.
Mike Robinson, senior partner at PwC in Milton Keynes, said that positive employment news, a fall in inflation and rising retail sales contributed to an “encouraging” outlook. He warned that recovery would remain fragile and vulnerable to the volatility in mainland Europe but urged businesses to look at other export markets.
Mr Robinson added: “The healthy rebound to GDP growth of 1% in the third quarter, together with other positive news from the labour market, inflation and retail sales supports our forecast for an improving outlook in 2013.
“Recent good news should also give the Chancellor a little more room for manoeuvre in his Autumn Statement on December 5 and we believe he should focus on measures to boost infrastructure investment while strengthening the supply side capacity of the economy in the longer term.”