BCC forecast: Business investment and productivity sinking amid Brexit stalemate and global slowdown
The British Chambers of Commerce has today (Monday) released its latest economic forecast, downgrading growth expectations for the UK in 2019 to 1.2% (from 1.3%) and to 0.8% (from 1.0%) for 2020. Our GDP growth forecast of 1.2% remains unchanged for 2021.
While the leading business group expects that the UK economy will avoid a technical recession and return to modest growth in the third quarter, downgrades to its GDP growth forecast for 2019 and 2020 reflect a weaker outlook for investment, trade and productivity amid a continued lack of clarity over the outcome of Brexit and deteriorating global economic conditions.
Business investment is now forecast to decline by 1.5% this year and by 0.1% in 2020, which together with the decline of 0.4% in 2018, would be the longest period of sustained full-year declines in business investment for 17 years. Relentless Brexit uncertainty and the diversion of resources by many businesses to guard against the chaos of a messy and disorderly Brexit, are expected to limit investment intentions over the forecast period.
UK productivity is projected to be more subdued than in our previous outlook and implies that by the end of 2020, the UK economy will have experienced its weakest decade of average annual productivity growth on record. Anaemic business investment, together with low unemployment, is expected to keep a lid on productivity, with firms expected to rely more on hoarding labour than investing in new technology given the heightened political and economic uncertainty.
The UK’s net trade position is forecast to weaken over the period as companies face the combined headwinds of relentless uncertainty on the UK’s future relationship with Europe, weakening growth in key international markets and mounting global trade tensions.
The BCC’s economic forecast assumes a messy and disorderly Brexit is avoided. A no-deal exit would lead to major, sudden and unanticipated changes for the UK economy and would lead to revisions in our next forecast.
The persistently listless growth forecast reflects the impact of a slowing global economy and increasing trade tensions, but is also a stark reminder of the impact of the political turmoil and lingering unwanted prospect of no-deal exit – the economic consequences of which would be extensive. The BCC is therefore calling on government to do everything in its power to come to a negotiated solution with the EU and to take urgent steps to incentivise investment and boost business confidence.
Commenting on the forecast, Suren Thiru, Head of Economics at the British Chambers of Commerce, said:
“Our latest outlook indicates that the UK economy is set to stumble down an ever more sluggish growth path over the near term, unless decisive action is taken.
“The prolonged nature of the Brexit uncertainty, including the still real risk of a no-deal exit, together with a deterioration in global economic conditions are expected to weigh on investment, trade and productivity – important determinants of economic growth. The deteriorating outlook for productivity is a particular worry as it limits sustained wage growth, living standards and the UK’s longer-term growth potential.
“The continued pressure on business activity and cashflow from historically high stockpiling, loss of business, and costly contingency planning is expected to limit the extent to which economic activity is able to rebound over the near term. Set against this, UK GDP growth will be supported in part by resilient household consumption and stronger government spending. Bold public spending commitments where the overriding objective is stronger growth and productivity can help support the UK economy at a time of significant change.
“The risks to the outlook for the UK economy remained skewed to the downside. A messy and disorderly departure from the EU would palpably increase the likelihood of the UK economy slipping into a marked downturn, particularly given the lack of actionable information that businesses need to help mitigate some of the impacts of a disorderly exit.”
Responding to the forecast, Adam Marshall, Director General of the British Chambers of Commerce, added:
“Our latest forecast shows a number of warning lights are flashing for the UK economy, even if we are able to avoid a messy and disorderly exit from the EU in just a few weeks’ time.
“There’s no dancing round the fact that Brexit uncertainty has hit business investment hard. In addition to reaching a negotiated settlement with the EU, the government should be preparing big new incentives for business investment in the UK, and should reconfirm its unconditional backing for the big infrastructure projects our economy needs to unlock growth.
“Amidst a slowing global economy and continued political uncertainty, the UK government needs to use the autumn Budget to back infrastructure, help businesses train and re-skill more people, and cut the high up-front costs of doing business in the UK.”
Key points in the forecast:
• UK GDP growth forecast for 2019 is downgraded from 1.3% to 1.2% and from 1.0% to 0.8% in 2020 and remains unchanged at 1.2% in 2021
• Quarter-on-quarter GDP growth is forecast to pick-up to 0.3% in Q3 2019, up from the 0.2% contraction in Q2
• Forecast for business investment growth been downgraded to -1.5% for 2019 (from -1.3%) and to -0.1% for 2020 (from +0.4%), before growth of 0.8% in 2021 (downgraded from 1.1%)
• UK official interest rates are expected to remain at 0.75% throughout 2019 and 2020, before rising to 1.0% in 2021, a year later than in our previous forecast
• UK public sector net borrowing is forecast to be £48.2 billion higher over the next three years than predicted by the Office for Budget Responsibility at the 2019 Spring Statement, reflecting marked changes to government spending commitments and weaker expected tax revenue
• BCC expects export growth of 1.3%, 1.3% and 1.5%, compared to import growth of 4.2%, 1.6% and 2.0%, both are weaker compared to our previous forecast
• Labour productivity is expected to grow by just 0.4% in 2019, 0.6% in 2020 lower than our previous forecast of 0.7% and 0.8% respectively. Our forecast for 2021 remains unchanged at 0.8%
• Forecast for growth in household consumption been upgraded to 1.5% for 2019 (from 1.4%), followed by growth of 1.4% in 2020 and 1.5% in 2021
• Average earnings growth is expected to outstrip inflation over the period, with growth of 2.9%, 2.8% and 2.9% respectively, compared with inflation of 2.1%, 2.2% and 2.1%.
Notes to editors:
Please contact the press office for the report, and spokespeople are available for print and broadcast interviews.
The British Chambers of Commerce (BCC) sits at the heart of a powerful network of 53 Accredited Chambers of Commerce across the UK, representing thousands of businesses of all sizes and within all sectors. Our Global Business Network connects exporters with over 50 markets around the world. For more information, visit: www.britishchambers.org.uk
Sisters are doing it for themselves…with the help of female run accountancy firm Premier Tax Solutions.
The North Staffordshire firm, led by Emily Precious and Vanessa Fuller, have clinched a deal to work as the official accountant for the annual the Women of the Year Awards.
“Promoting women in business is, of course, close to our hearts at Premier Tax Solutions and we are delighted to get involved with the Women of the Year Awards,” said Vanessa.
“Just looking back at the past winners is inspiring as is the organisations Board, with names such as Baroness Helen Newlove and former TV “dragon” Jenny Campbell. The event has strong Staffordshire links thanks to Zalena Vandrewala, a Senior Associate at Freeths, in Stoke. We have a long association with Zalena as she has mentored Emily and me as we have built the Premier Tax Solutions team. Zalena is a true friend and a wise source of advice for us.
“The Women of the Year Awards are fabulous and it is a not for profit organisation with surplus funds passed to charities. The directors give their time for free and they have promoted some incredibly talented women over the years.”
Director and Chair, Zalena Vandrewala said “We welcome Premier Tax Solutions to the support team for The Women of the Year Luncheon & Awards and recognise their achievements as a growing accountancy practice, led by two strong female entrepreneurs.
“I have mentored Vanessa and Emily throughout the continued expansion of Premier Tax Solutions. They are tenacious, commercially minded business women who have driven growth and established a modern and forward thinking company. We are proud to work alongside them to deliver these national awards.
Premier Tax Solutions was founded by Emily and Vanessa six years ago when they were both just 26-years-old. The duo have grown the firm to a team of six and have offices in Cheadle, Staffordshire Moorlands, and Shelton, Stoke-on-Trent.
Vanessa added: “2019 has been incredibly busy so far. Premier Tax Solutions has gained a reputation for Cloud accountancy, we are a Gold provider with Xero and this has helped our business to grow, particularly this year with the new HMRC Making Tax Digital requirements for companies.”
Opening their headquarters at the Daisy Bank Business Centre, Cheadle, in 2018, has helped to diversify Premier Tax Solutions customer base and the business has plans to expand to a team of eight.
International Road, Rescue and Trauma Consultancy Ltd are a team of experts from the Rescue and Medical services and the Military who are now available to deliver Rescue and Trauma training globally and locally here in Staffordshire.
The team offer a brand new concept to deliver training not only to rescue workers, but also to organisations who work in remote areas or under developed countries where local response arrangements are insufficient. Organisations are provided with the skill set to be able to rescue and treat themselves.
In addition, all trainers have relevant teaching qualifications in order to impart their knowledge to others in a relaxed yet professional manner. Using Yarnfield Park Training and Conference Centre here in Staffordshire as one of the training centres, RTTC are now working with multiple organisations globally who recognise the benefit of this approach.
For more information on the bespoke training available, please call 07760 168767
Staffordshire University Associate Professor and Chair of Platform, Peter Rudge, has been invited to join the World Economic Forum (WEF) Expert Network of global thought leaders.
The WEF is a not-for-profit organisation headquartered in Geneva, Switzerland which brings together influential leaders from all over the world to help shape global, regional, and industry agendas, and effectuate positive change.
Members, who are invited through nomination, represent businesses, academic institutions, and government bodies that are among the world’s top innovators, disruptors, and regional champions – and who help their respective economies thrive and contribute to societal prosperity. Famous members include Sir David Attenborough, Sir Richard Branson,, and UN Secretary General Antonio Gutteres.
A BAFTA member and named in the Creative England list of top 50 leaders and innovators, Peter has been leading the growth of the digital creative industries in Stoke on Trent and Staffordshire through Platform, the region’s moving image cluster. Peter said: “I’m absolutely thrilled and honoured to have been asked to join the WEF Expert Network and to have my voice heard amongst those of other global leaders from across industry, academia, government and civil society.
“It is such a fantastic opportunity to be a part of shaping our response to the significant challenges we face as a society – whether that’s here in Stoke on Trent or across the globe. I’m very much looking forward to meeting some of the other expert members and to being an active part of the WEF’s work both now and in the future.”
The WEF holds its annual meeting in Davos, Switzerland where members and world leaders gather to contribute their expertise and thought leadership on the most important global issues and developments of our time.
Hanley Economic Building Society has been awarded 3-star accreditation from Best Companies and has been identified as one of the UK’s best small companies to work for in 2019 by the Sunday Times.
On Wednesday 20th February 2019, team members headed to a black tie dinner in London with fellow small companies and not-for-profits to collect the award and to toast the fantastic achievement.
A coveted award nationally, the 3-star accreditation from Best Companies displays an organisations’ employees are truly engaged, “they’re happier, more productive and more invested in your organisation’s success” and shows an exceptional standard of workplace engagement.
Consistently appearing in the Best Companies list, the Society clearly displays an ongoing commitment to colleagues. Mark Selby, CEO of Hanley Economic Society said; “As a CEO it’s deeply important to me to create a great place to work. People forget the numbers but remember what it’s like to work with you. We’ve tried to create an environment where people feel valued and supported by their colleagues, paid fairly and invested in”.
The Society also encourages staff to give back to the community by offering up to 4 of their working days to volunteer for local charitable courses, supports their future by offering an enhanced pension scheme and everyone receives their birthday off.
Hunter Heywood Ltd, Newcastle-under-Lyme’s newest recruitment agency, has joined Staffordshire Chambers of Commerce.
“It’s been a bit of a whirlwind for us since launching just over three weeks ago, but joining the Chambers of Commerce was a priority for us from day one,” said Ashley Heywood, Co-founder and Marketing & Tech Director. “In addition to accessing well-organised, enlightening events and much more, membership with the Chambers also reinforces our desire to build long-term relationships with local businesses.”
Hunter Heywood Ltd was established by Robbie Hunter and Ashley Heywood after securing investment from three successful entrepreneurs. With over 20 years’ experience at management level in recruitment, Robbie will lead the delivery team and deliver recruitment services to businesses of all sizes and sectors.
On 10th July 2019, Staffordshire County Council will be hosting the fifth Annual Dignity Awards at Newcastle-under-Lyme College. This is a wonderful opportunity to recognise and reward those who provide care and support with dignity at the heart of everything that they do, and whose actions make a difference and serve as an example to others throughout the region.
The Awards will recognise those who care as a profession, plus informal and young carers, amongst others. Carers UK suggest that one in eight adults are informal carers (around 6.5 million people), and over one million people care for more than one person. The Department of Education advises that there are almost 166,000 young carers (aged 5-17) in England alone. It is therefore likely that you and your colleagues will know someone who receives care or who may be an informal carer themselves.
In Staffordshire there are approximately 15,500 people working as professional carers; they work diligently to ensure that care is delivered in a dignified manner to citizens across the county 365 days a year, 24 hours a day. Our professional social care workforce continues to provide care in sometimes difficult circumstances, in all kinds of weather and across our urban and countryside areas.
This is a self-financing event which relies entirely on business sponsorship. Staffordshire County Council would therefore be extremely grateful if your company would consider sponsoring the Dignity Awards for 2019. This could be one of several things – by providing a prize for the Dignity Award winners, a raffle prize for the day or financial sponsorship to enable the running of the event. The team require funding towards the cost of promoting the event, refreshments and lunch for attendees on the day, trophies, certificates and printing of the programmes. This is very much an opportunity to give something back to those who care for the most vulnerable amongst us.
In return for your kind offer of sponsorship, Staffordshire County Council will ensure your company name and logo are published in the awards programme, and your company details will be carefully placed on display screens during the ceremony. The team would also ensure that you would be referenced in any post-event communications across the region, including local media.
View information about last year’s awards at www.staffordshire.gov.uk/health/care/dignityincare/dignity-in-care-awards2018.aspx
Adrian Lowe joins Keele University Events and Conferencing in the new position of General Manager, leading the team at Keele Hall, as part of the senior team within Events and Conferencing.
Keele University Events and Conferencing manage University events as well as the commercial business throughout the year at Keele Hall and in vacation time across the campus. This new role is pivotal to the senior team to continue to develop business strategies to support the University’s key objectives and to position Keele University Events and Conferencing as a leading academic venue in the United Kingdom.
Lowe has a wealth of experience working within the academic and education sector having previously worked for; Staffordshire University as Head of Catering & Conference and at Aston University as Catering Operations Manager.
Adrian said: “I am absolutely delighted to be joining Keele and working with the team at Keele Hall. It’s an amazing place, steeped in history in a truly wonderful setting. I am really looking forward to contributing to the refocus and development of the venue with the events and operational teams to keep Keele as a key leading solution for conferencing and events in Staffordshire.”