Growing confidence will weave its magic on the economy

These have always been curious figures because they are very much rear view economics with what’s happened in the past, influencing the business decisions of the future. However, businesses, economists, politicians and the public pay attention to them as they form one of the key components of the antidote to our economic woes, that great intangible, confidence.

In the second quarter of 2013 the economy grew by 0.7 per cent, which sounds unspectacular, but considering the position the economy has had to recover from after the 2007-8 financial crisis, these are good numbers. If that rate was maintained, we’d achieve annual growth of just under 2.5 per cent, which would be a position we’d be grateful to be in.

However, this Friday’s figures for the third quarter may provide a further boost to the economy. Taking my own business as a litmus test, things are feeling more positive. In the same period covered by this week’s GDP figures, we’ve experienced sales growth of between 7.9 per cent and 12.9 per cent during June, July and August. In real terms, this has meant extra sales worth £341,000. As you can imagine, we are proud of our achievement!

A significant element of our growth has to be attributed to the ‘confidence’ factor. In general, our customers feel more secure in their lives and are confident enough to make the kind of spending decisions they’ve avoided over the past four or so years.

Of course, the level of unemployment, particularly among the under 25s, remains the unavoidable elephant in the room; but the overall economic picture feels a lot better.

Maybe we are seeing those mythical green shoots that politicians avoid talking about. In the last two years, the economy has felt like an acorn trying to break through the soil, but now it’s beginning to grow into a small tree.

Every wave of confidence that washes over the economy is the equivalent of another ring being added to the tree’s trunk making it stronger and more robust.

If we can maintain the growing levels of confidence among consumers and businesses our economic tree can go on to become a Great British Oak that can withstand even the harshest conditions in the future.

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