Free Newsletter
Register for our Free Newsletters
Newsletter
Zones
Associations, Services and Universities
LeftNav
Automotive Industry
LeftNav
Design & Manufacturing Services
LeftNav
Education, Training and Professional Services
LeftNav
Electrical Components
LeftNav
Electronic Components
LeftNav
Energy
LeftNav
Fastening and Joining
LeftNav
Laboratory Equipment
LeftNav
Machine Building & Automation
LeftNav
Maintenance, Repair and Overhaul (MRO)
LeftNav
Materials & Processes
LeftNav
Materials Processing and Machine Tools
LeftNav
Mechanical Components
LeftNav
Packaging
LeftNav
View All
Other Carouselweb publications
Carousel Web
Defense File
New Materials
Pro Health Zone
Pro Manufacturing Zone
Pro Security Zone
Web Lec
 
 
Editor's Blog and Industry Comments

CBI economic forecast: UK organic growth beginning to return?

13 February, 2013
The UK economy is expected to grow modestly in 2013, with the pace picking up in 2014, according to the CBI’s latest economic forecast published today (Wednesday). But the UK’s leading business group warned that external risks to the outlook, in the Eurozone and further afield, remain.


The CBI is forecasting GDP growth of 1% in 2013, slightly below its previous forecast of 1.4%. This reflects the weaker-than-expected growth rate in the fourth quarter of 2012 (-0.3%). Quarter-on-quarter growth is expected to be marginally positive (0.3%) in the first quarter of the year, and stay between 0.3-0.4% for the rest of 2013.



Next year, the CBI is expecting growth of 2%, unchanged from its November forecast. Quarter-on-quarter growth is expected to be modest at around 0.5-0.6%.



John Cridland, CBI Director-General, said: “We are beginning to see the return of organic growth, with clear signs that firms offering the right products into the right markets are growing sales and expanding. Recent business surveys also give grounds for cautious optimism about our forward prospects. Looking ahead, external risks to the outlook in the Eurozone and further afield are likely to keep growth at home and abroad in check. The potential for Eurozone tensions to flare up again, coupled with tough conditions in the domestic market, explain why business confidence remains patchy. After the uncertainties of 2012, the fear of external storm clouds lingers.”



The CBI is forecasting that inflation will edge higher until mid-2013, but will fall back in the second half of the year, and will be close to the Bank of England’s 2% target throughout 2014. Unemployment levels are unlikely to change significantly over the forecast period, at 2.5 and 2.42 million in 2013 and 2014 respectively.



Uncertainty on the international front is likely to continue to act as a restraint to business investment growth, which is expected to remain modest at around 6% in 2013 and 2014. Meanwhile, the weak outlook for Eurozone growth continues to depress export prospects. Net trade is likely to be flat this year and next (-0.1% and 0.1% respectively).



Conditions will still be difficult for households in 2013, given weak growth in household spending power and unemployment at around 7.8%. Household consumption growth of 1.1% is expected this year.



Cridland added: “The recovery is a long drawn out process of adjustment, alongside deficit reduction, but there’s still scope for policy to provide further support. We’ve called for the Government to boost capital spending by digging a bit deeper on current expenditure, and to get investment spending flowing in the short term, for example on much-needed repair and maintenance of the roads system.”


Bookmark and Share
 
Home I Editor's Blog I News by Zone I News by Date I News by Category I Special Reports I Directory I Events I Advertise I Submit Your News I About Us I Guides
 
   © 2012 ProManufacturingZone.com
Netgains Logo