Auditel Consultant:
Lee Freeman

Heads or Tails – recovery or recession

03 Aug 2010 | Filed under: government, The Budget

So the question I have been asking myself this morning is “Are we on the road to recovery or not? And the answer is, well reading the views of a number of so-called experts over the weekend is “I haven’t got a clue”. There was certainly some promising data published such as:

The Chartered Institute of Purchasing and Supply index notched up its 10^th month of growth in a row ,and finished the month just behind last month’s 15 year record high (http://www.telegraph.co.uk/finance/newsbysector/industry/7922855/UK-manufacturing-output-hits-15-month-high.html).
The UK economy showed 1.1% quarter on quarter growth for Q2.
The number of job adverts placed in Q2 showed an 8% increase, which has been a result of increased headcount as output has increased and new orders remain strong.

All the above would appear to point to an economy that is certainly in recovery mode. However there are certainly dark clouds on the horizon. From the articles I have read most experts are united in the belief that any complete recovery has to be export driven and therein lies the worry. As our biggest trading partner, Europe potentially therefore holds the key to the success or not of Britain avoiding a double dip recession. I am sure most of you are aware of the issues that certain Euro zone countries are facing at the moment with various sovereign debt concerns, and it is this that obviously poses the significant threat to the UK Economy.

The second area where people are expressing concern and have done for the last 6 weeks or so is the effect the cuts in government spending announced in the Emergency Budget will have on the UK economy. For those regular readers you already know my thoughts on how achievable those targets are, but I did smile at an article in the Telegraph recently proposing that civil servants would be better off doing without desks at all, and the impact this would have on achieving the targets that have been set?

http://www.telegraph.co.uk/comment/telegraph-view/7923083/A-smaller-state.html

More suggestions welcome, and in the good old-fashioned way answers on a postcard to George Osborne, The Treasury, London.

So coming back to my original question are we on the road to recovery? My personal opinion is yes we are but we are certainly not out of the woods yet. This view also appears to be shared amongst my colleagues and other small business owners I meet during the course of my work. So at the end of the day it is a coin toss at the moment, and let’s hope it comes down on the right side for once. What can we do to help I hear you ask, well given we are reliant on the Euro zone as an export market to fuel our recovery, pack the suntan lotion and Speedos and head to the beaches of the Med!! At least it will be warmer if nothing else.