Construction and car sales fuel UK recovery

Recession fears are easing as construction, car sales and retail sales fuel UK business recovery



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British business is showing new signs of life with bosses hoping ‘the worst storms in the economy are over’.

As a boost to the chancellor ahead of next week’s budget, the construction sector posted its fastest growth in nine months and new car sales rose for the seventh month in a row.

A third report showed that retail sales held up strongly.

Recovery: The construction sector in the UK recorded its fastest growth rate in nine months

Recovery: The construction sector in the UK recorded its fastest growth rate in nine months

The triple dose of good news will allay fears that the UK is heading for a prolonged recession as rising prices and rising interest rates take their toll.

But concerns are mounting over Jeremy Hunt’s proposal to raise the corporate tax from 19 percent to 25 percent next month while ending a generous investment tax cut.

Entrepreneur Sir James Dyson has written to Hunt to express his concerns about the two ‘tax grabs’.

He wrote: ‘The government has done nothing but pile up tax upon tax on British companies.’ The warning came as S&P Global said its construction activity index rose from 48.4 in January to 54.6 in February.

That was the highest level since May last year and again above the 50 mark that separates growth and contraction.

Tim Moore, economics director at S&P Global, said that while residential construction remained weak, the commercial real estate sector recovered.

“Some firms noted that receding recession fears and an improving global economic outlook had boosted customer confidence in the commercial segment,” he said.

Max Jones, a director of Lloyds Bank’s infrastructure and construction team, said: “A return to growth will be welcomed by contractors, who hope the worst storms in the economy are over.”

A separate report from the Society of Motor Manufacturers and Traders found that 74,441 new cars were registered last month – 26.2 percent more than in February 2022 and the seventh straight month of growth.

The CEO, Mike Hawes, said: ‘After seven months of growth it is no surprise that the UK automotive sector is looking to the future with growing confidence.

However, it is vital that the government takes every opportunity to support the market, which plays an important role in the UK economy and its ambition to be net zero.

‘The upcoming budget should provide measures that stimulate this transition, making it more affordable and easier to charge for everyone.’

And a report from the British Retail Consortium showed that retail sales rose 5.2 percent last month as consumers flocked out despite the rising cost of living.


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