Business leaders welcome encouraging GDP trend

Business leaders in Greater Birmingham have given a grateful welcome to latest trade estimates, which showed an increase in second quarter GDP.

The Office for National Statistics said GDP was estimated to have increased by 0.3% between Q1 and Q2.

Growth in Q2 was dominated by the service sector which grew by 0.5%.

There was also relatively strong growth in government spending and investment, although household spending (0.1%) and business investment (unchanged) during the same period were “sluggish”.

Nevertheless, business leaders said the Q2 figures were a further sign of an economy showing its resolve.

Greater Birmingham Chambers of Commerce chief executive Paul Faulkner said: “It was reassuring to see a pick-up in GDP growth levels for Q2 as once again the British economy demonstrated its resoluteness in the face of wider political uncertainty.

“It was also heartening to see an increase in service sector output which made up for the slower level of growth in the manufacturing and construction sectors.”

However, he said it remained to be seen how long service sector growth could be sustained given the relative slowdown in consumer spending caused by higher inflation levels and weak wage growth.

“Business Investment was also revealed to be sluggish this quarter, a theme we saw reflected in our Q2 Quarterly Business Report, as local firms reported stagnant investment levels in light of Brexit uncertainty,” he added.

The chamber is currently compiling data to identify trends for its own Quarterly Business Report.

“It will be interesting to see if these trends are still prominent in the latest findings,” added Mr Faulkner.