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Stefano Silvestrin of Nationwide

Wiltshire businesses more confident as UK economy takes an upturn

There was an upbeat message at the first Swindon Chamber of Commerce meeting of 2014 – it looks like the economy is on the up.

Stefano Silvestrin, senior economist at Nationwide, showed graph after graph, each of which showed lines heading to the top right corner.

What’s more, said Stefano, the recovery is being felt across all the major sectors of the economy, including services, manufacturing and construction, and the UK is experiencing faster growth than any other of the world’s developed economies.

One of those upwarding-trending graphs showed the 2014 economic growth predicted by forecasters – 1.5 percent at the start of 2013, 2.5 percent by the end of the year, and 2.7 percent now.

“There is reason to be optimistic,” said Stefano.

However – because there has to be a however – the UK economy is still two percent smaller than it was in 2008, and the UK trade deficit is creeping back up from a low of £6 billion per month in 2009 to £7.5 billion today.

At the rate it’s going, we may soon be back at the 2007 high of £9.5 billion.

And as real wages growth has declined since 2008, it’s likely we’re all feeling the pinch.

What is needed to kickstart real growth, said Stefano, is investment. But firms aren’t investing anything like as much as they need to.

The main reason given for not investing is “uncertainty of demand.” In other words, we need to break the chicken and egg situation where companies won’t invest to drive productivity without confidence, and confidence will be slow to come without real economic growth.

Locally, businesses are feeling positive. A recent report suggested 69 percent of Wiltshire firms expected a higher turnover this year than last (up from 58 percent at the start of 2013), and that 89 percent are confident of their economic prospects in 2014.

“There are signs of a stronger recovery than expected,” said Stefano “but we’ve lost almost a decade of growth.

“However, these are encouraging signs for the UK economy… it’s picking up speed.”