North West economy to grow by 1.5%, predicts PWC

THE North West economy should return to growth in 2013, according to the latest nationwide economic forecast from accountancy group PwC.

PwC’s latest UK Economic Outlook says that while overall UK economic growth will be flat in 2012, it should grow by around 1.8% in 2013, with London and the South East leading a modest recovery. The North West is forecast to grow by around 1.5% in 2013.

Figures from the labour market also remain positive, with the second quarter employment rate up 0.5% to 71.3%. In the North West it stands at 69.8%.

PwC said the problems facing the UK in 2013 include a flat housing market, slowly returning consumer expenditure and a lack of public spending growth. Export opportunities will also remain subdued as the eurozone crisis constrains demand in highly competitive market conditions, said the report.

However, PwC’s North West chairman Iwan Griffiths, pictured, said people should benefit from falling inflation. “Inflation has fallen from 5.2% in September 2011 to close to the Bank of England’s 2% target,” he said.

“And while it may increase slightly, we still expect consumer spending growth of around 0.7% in 2012 and 1.3% in 2013 as lower inflation eases the squeeze on real disposable incomes that led to a 1.1% fall in real consumer spending in 2011.

“That recovery could, in turn, stimulate a gradual rise in business investment in response to stronger consumer demand and some improvement in global growth during 2013 further boosting UK net exports.”

He added: “Our economic weather map for 2013 is mixed; some sunny spells around anticipated economic growth, but the challenge of continuing to tackle unemployment and rebalance the economy will cast patchy cloud over recovery.

“However, the more positive national data on GDP, employment, inflation and retail sales suggests that the North should benefit from a faster and deeper recovery elsewhere in the UK.”