Economy needs ‘comprehensive rebuild strategy to turbocharge growth’, say Chambers of CommerceAug 20, 2021
Magna Park, home to leading logistics and distribution companies.
BUSINESS leaders in Milton Keynes and Northamptonshire welcomed the leap in economic growth in the second quarter of 2021.
But the Chambers of Commerce is warning that the 4.8% growth in GDP between April and June still leaves economic output under pre-pandemic levels.
Sean Rose, policy executive at Milton Keynes and Northamptonshire Chambers of Commerce, said: “We have seen the economy opening up in recent months as Covid-19 restrictions have eased and that is reflected in this leap in the GDP numbers for the second quarter of the year, which is very welcome.
“However, the economy is still short of its peak and there are undoubtedly many underlying issues that are going to weigh on businesses even now the vast majority of restrictions have been lifted.
“Businesses across the region are still going to need support as they move from survival mode to looking to grow again, while the government must remain fleet of foot in dealing with any unforeseen issues that arise as the economy recovers.”
Suren Thiru, head of economics at the British Chambers of Commerce, said: “The latest data confirms a robust rebound in output in the second quarter as the UK economy unlocked and restrictions eased.
“The increase in output in the second quarter largely reflected a striking rise in household spending as the easing of restrictions helped consumers spend some of their ‘unanticipated’ savings accumulated during lockdowns, boosting output from consumer-facing services firms.
“Business investment remains well short of pre-pandemic levels following an underwhelming revival in the second quarter and means that it may be a weak point of the recovery, limiting UK productivity and competitiveness.
“Strong growth in the second quarter may be the high point for the UK economy with economic activity likely to moderate in the third quarter as staff shortages, supply chain disruption and consumer caution to spend limits any gains from the lifting of restrictions in July.
“Against this backdrop, policy makers must guard against complacency over the underlying strength of the recovery. A comprehensive rebuild strategy to turbo-charge growth post Covid is needed, alongside a clear plan for dealing with any future virus response, to give firms the confidence to start firing on all cylinders again.”