Recession fears ease as construction, car sales and retail drive UK business recovery
British business is showing fresh signs of life with bosses hoping that ‘the worst of the economy’s storms have passed’.
In a boost for the Chancellor ahead of next week’s Budget, the construction industry clocked up its fastest rate of growth for nine months, and sales of new cars rose for a seventh month in row.
A third report showed retail sales holding up strongly.
Bouncing back: The UK construction industry clocked up its fastest rate of growth for nine months
The triple dose of good news will ease fears that the UK is heading for a prolonged recession as soaring prices and rising interest rates take their toll.
But concerns are mounting over Jeremy Hunt’s proposal to raise corporation tax from 19 per cent to 25 per cent next month while also bringing a generous tax break on investment to an end.
Entrepreneur Sir James Dyson has written to Hunt to voice his concerns about the two ‘tax grabs’.
He wrote: ‘The Government has done nothing but pile tax upon tax on to British companies.’ The warning came as S&P Global said its index of activity in the construction sector jumped from 48.4 in January to 54.6 in February.
That was the highest level since May last year and back above the 50 mark that separates growth and decline.
Tim Moore, economics director at S&P Global, said that while housebuilding remained weak the commercial property sector bounced back.
‘Some firms noted that fading recession fears and an improving global economic outlook had boosted client confidence in the commercial segment,’ he said.
Max Jones, a director in Lloyds Bank’s infrastructure and construction team, said: ‘A return to growth will be welcomed by contractors, who are hoping the worst of the economy’s storms have passed.’
A separate report by the Society of Motor Manufacturers and Traders showed 74,441 new cars were registered last month – up 26.2 per cent on February 2022 and the seventh month of growth in a row.
Its chief executive, Mike Hawes, said: ‘After seven months of growth, it is no surprise that the UK automotive sector is facing the future with growing confidence.
‘It is vital, however, that Government takes every opportunity to back the market, which plays a significant role in Britain’s economy and net zero ambition.
‘The upcoming Budget must deliver measures that drive this transition, increasing affordability and ease of charging for all.’
And a report by the British Retail Consortium showed that retail sales rose by 5.2 per cent last month as consumers splashed out despite the rising cost of living.