There was positive news for the economy this week as it was announced that GDP has grown by 0.8% in the past quarter. The news was welcomed by Chancellor George Osborne, who described the GDP figures as a “major milestone”, but he warned that there was more to do.
The CBI says that the latest figures show that the economy is continuing to make a recovery that is “built on solid foundations.” The CBI has stated that it is hopeful that the recovery will keep “motoring along” at the same steady pace throughout the rest of 2014 and into 2015.
Manufacturing Growth
The latest survey from the CBI showed that the UK manufacturing industry is continuing to make a steady recovery. Survey respondents from the manufacturing industry and retail and service sectors have all recorded strong growth in the last quarter.
However, the survey is especially good news for the manufacturing industry as figures for the past quarter showed that manufacturing experienced its strongest growth for five months.
Katja Hall, CBI Deputy Director-General, said:
“There are signals that the recovery may now be on a more sustainable footing, with growth becoming more broad-based as business investment in particular grows strongly.
“But there are still long-standing issues around boosting exports, while disappointing productivity could impact wages and household spending. Firms will also be carefully monitoring the situation in Ukraine and parts of the Middle East, where political volatility is likely to make the global economic environment that bit tougher.”
Order book growth has also improved significantly, showing their strongest growth for nearly 20 years. Moreover, manufacturing firms expect there to be an increase in orders in the next quarter.
Export orders haven’t experienced the same recovery as yet; it is predicted that export orders will recover. However, a stronger growth in domestic orders is continuing to help fuel the manufacturing industry.
Key findings from the latest survey shows that manufacturers have reported a 41% increase in orders; 42% of manufactures expect their orders to increase in the coming months.
Katja Hall, CBI Deputy Director-General said that the recovery in the manufacturing industry was “keeping a good pace”; however, the Deputy Director General urged caution stating that there are “still risks to the economy”.