Economy Showing Tentative Signs of Recovery
The worst of the recession may be over and the economy is showing signs of recovery, according to growing numbers of economists.
Research from the Federation of Small Businesses (FSB) found that small firms are starting to see the signs of a ‘tentative’ recovery, including improved trade, increased confidence and better access to finance.
The survey of more than 4,000 small firms revealed that trade had increased for 23% of them between April and June 2009. Just 16% said that trade had improved between December 2008 and February 2009.
FSB spokesman, Marc Shoffman, said:
“We don’t want people to overstretch themselves or get too excited, but there are signs that businesses are starting to recover and are looking to expand. Since the Enterprise Finance Guarantee Scheme was introduced in January, bank managers are lending more to small firms and this is freeing up finance in other areas.
“When we will start to see growth depends on what happens over the next six months and whether the Government introduces initiatives to help stem unemployment and ensure banks keep on lending.”
According to the British Chambers of Commerce (BCC), the worst of the recession is over, but recovery is not guaranteed. The business group’s quarterly survey revealed that business confidence has improved, although it predicted that unemployment will reach 3.2 million by mid-2010.
David Frost, Director General of the British Chambers of Commerce said:
“Our economy is based on confidence, and wealth-creating businesses need to know they will be given the freedom and flexibility to drive the UK out of recession and into a sustainable recovery. The Government needs to think long and hard about its policies on taxation and red tape, which threaten to stifle growth and employment.”
BCC chief economist, David Kern, added:
“The pace of decline in the UK economy is clearly moderating, but serious downward pressures persist across all sectors and regions. The marked improvement in confidence, albeit from exceptionally low levels, is welcome.
“However, these recent gains can only be sustained if the economy continues to stabilise and the recession ends.”
Think tank the National Institute of Economic and Social Research (NIESR) also indicated that the economy is no longer contracting.
“The UK economy is now stagnating rather than continuing to contract at a sharp pace.”
said a spokesperson from the NIESR.