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Comment: Hopeful signs emerge of economic recovery
5:23pm Thursday 22nd August 2013 in Opinion
For a change we are hearing some good news reports in the media. It was once said that bad news makes ‘good’ news, but is this now the real news that we have all been waiting for in that reportedly the UK economy is showing signs of recovery?
A triple boost should come in the reports that factory output is surging, there have been higher numbers of cars sold recently and that there is rising activity in the housing market.
Surely this, coupled with the feel good factor that the recent warm weather has brought, must be a sign of confidence returning to the United Kingdom as a whole. After all, people do seem happier in South Lakeland when the sun is shining than when rain is fall-ing in bucketloads from the sky.
The Office for National Statistics said an across the board increase saw manufa-cturing production growing by 1.9 per cent and that in the three months to July both factory output and industrial production have increased by 0.7 per cent and 0.6 per cent respectively, giving a better guide to the underlying trend.
The Society of Motor Manufacturers and Traders has raised its growth forecast for 2013 following figures for July showing that 162,228 vehicles were sold during the month, a rise of more than 12 per cent on July 2012 and the seventeenth successive monthly increase.
The Royal Institution of Chartered Surveyors June Residential Market Survey highlights a growing imbalance between demand and availability in the residential property sales market.
The upshot appears to be a firmer price and sales picture set against relatively tighter market conditions.
There is mounting evidence that rising demand is at least partly being driven by easier credit conditions.
Meanwhile, medium and long term house price expectations are turning increasingly positive, a sentiment backed up recently by the Halifax, the UK’s biggest mortgage lender, who reported that government schemes were encouraging buyers back into the market.
Such positive growth in industrial output and the two biggest ticket items of consumer spending may be the fresh signs that the UK economy can achieve ‘escape velocity’, the hot new macro-economic buzzword Mark Carney, the new governor of the Bank of England, has used to explain sustainable growth.
Is this then the feelgood factor that we have all been waiting for?
Such a stream of positive economic data in recent days has certainly pointed to a sustained recovery, especially after the British Retail Consortium has said that like for like sales on the high street were 2.2 per cent higher than a year ago.
It sited a number of factors including the warm weather, heavy discounting by stores, sports events and, of course, the birth of a Royal baby, which have all encouraged people to spend more money.
In a response the pound recently rose nearly three cents against the US dollar and almost two cents against the euro as optimism grew. This must be good news when such positive financial shifts are seen by a global audience and it may just help the spending money in our pockets for those heading abroad on holiday.
It seems, then, that the timing of the recent heat wave and seasonality of such good news have been major contributors to the feelgood factor and confidence which is building throughout the country and the proverb ‘make hay while the sun shines’ may just be ringing true.
Let’s hope the sun shines a little longer, at least on our own little corner of the United Kingdom and that such good news is reported more frequently.
ANDREW HOLMES, Partner and Head of Residential at Thomson Hayton Winkley Estate Agents
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