Modest growth but worries lie ahead, says KPMG
There are "worrying signs" in the economy despite relatively positive GDP figures being released, a Birmingham-based analyst has claimed.
The third quarter gross domestic product (GDP) figures, which were released yesterday (31 October 2011), revealed growth of 0.5 per cent - slightly ahead of forecast.
Manufacturing and production sectors grew by 0.5 per cent, following a 1.2 per cent fall in the previous quarter.
But the construction sector refused to pick up, posting a fall of 0.6 per cent in the third quarter and a 4 per cent decline compared to the comparable 2010 period.
Mike Steventon, senior partner at KPMG in Birmingham, said there were underlying signs which "could weigh heavily on future growth".
"Unemployment has hit a 17 year high at 2.57 million and the European Purchasing Managers Index fell to its lowest level in October 2011, which predicts contraction in key European markets including Germany," he said.
"Europe remains our largest export market and the devaluation of Sterling over the last couple of years, combined with economic growth in the major European economies, has significantly helped UK business increase exports – indeed increasing exports have been a key driver of the UK’s recovery from recession."
