For the last six months I have had an increasingly uneasy feeling that what economists are telling me about the UK economy doesn’t fit with my own experiences. TechMarketView has just finished a year of unprecedented 50%+ growth. Houses around us are increasing in value again. My stock market investments have recorded unprecedented gains as stock markets in the UK and US hit new highs. The ONS is revising up previous growth rates to the point where the last recession might just disappear. I’m even having difficulty getting a plumber to give us a quote.
When I came out with my IT’s all over now? prediction in 2002 I seemed to assume the mantle of being the industry’s pessimist. It was greatly unfair as the actuality was far worse than I had predicted. But perhaps now is the time to kill that mantle once and for all.
I believe that the UK is already in a significant recovery. Indeed both the CBI and the OECD have come out with similar observations today. Indeed, can I direct you to the PwC Global Economy Watch May 13, also issued today. As you will see from the table, PwC is predicting real UK GDP growth of 1.0% in 2013 and 2.0% in 2014. The really interesting point is that, for both years, this is a higher growth than any other country in the Eurozone including Germany which is forecast to grow by ‘just’ 0.4% in 2013 and 1.6% in 2014.
As the PwC projections show, the Eurozone really is the 'Sick man of the World' now. Growth in the US is getting stronger and stronger – up 2.1% in 2013 and 2.8% in 2014. The US is the UK's largest export market. Exports to the US soared by 21% in Feb 13. 85% of all the UK's GDP is either domestic or earned outside of Europe. Of course, it is the BRICs that lead the way in the growth stakes as the PwC chart shows. We 'must do better' here. But, without being political in any way, it is trade with these countries, rather than the Eurozone, which will really lead to the UK’s recovery and future prosperity.