Coventry and Warwickshire Chamber reacts to GDP fall
Business leaders in Coventry and Warwickshire have reacted to a fall in economic output in the second quarter of the year.
GDP – the measure of economic activity – fell by 0.1 per cent between April and June after growing in the first quarter of the year.
Corin Crane, chief executive of the Coventry and Warwickshire Chamber of Commerce, said it reflected the concerns of members.
He said: “When we speak to businesses across the region we are hearing the same issues time and time again.
“Costs are going up, supply chains are disrupted and recruiting people is not easy. It’s all making it difficult for firms to implement their growth plans and that is why investment is falling.
“The drop in GDP will come as no real surprise because it reflects the message we are getting from businesses.
“As I’ve said before, there is so much going for Coventry and Warwickshire and we have lots of exciting opportunities ahead of us but there is no question that urgent action is needed to help reduce costs and bolster confidence.”
David Bharier, Head of Research at the British Chambers of Commerce, said: “Today's 0.1 per cent fall in GDP data is yet another signal that the UK economy is moving in an alarming direction.
“While some consumer-facing industries have benefited from further withdrawals of Covid restrictions on travel, the retail sector saw a one per cent decline in the quarter, reflecting the unprecedented pressures from inflation and global supply chain disruption.
“The 0.2 per cent fall in real household consumption reflects continued weakness in consumer confidence and a mounting cost of living crisis.
“Business investment remains a serious challenge. While investment in construction has increased, other forms of investment, including for machinery and equipment, continue to fall.
“Since 2021, our research has been flagging the damaging impact of inflation, it is wiping out many firms' profit margins and threatening their long-term growth.
“Supply constraints caused by global Covid lockdowns and conflict in Ukraine, coupled with soaring energy costs, have created a perfect storm that many small businesses are struggling to weather.
“Worryingly, our research is also pointing to decreasing business confidence as fewer firms expect to see any turnover growth in the next 12 months.
“That’s why it is becoming critical for the Government to take action as soon as possible. They must immediately cut the VAT on businesses’ fuel bills to five per cent. The longer the economy is left to drift towards the danger zone the harder it will be to rectify.”
