A number of the UKís leading economists have forecasted that official data set to be released this week on the trajectory of the economy during the final quarter of the year will have an entirely positive picture on its growth.
Economists have predicted that the data will show that 2013 was Britainís best economic performance in six years, with many estimating that the total growth for the year will be around the 2% mark.
And whilst the economy is still well short of its pre-recession state, economists have said that its performance in 2013 was a step in the right direction and displayed the success of the governmentís austerity and forward guidance policies.
Growth for the final quarter has been estimated to have been 0.7%, which was slightly less than the 0.8% witnessed during the second and third quarters of last year.
However, with the data yet to be confirmed, there has also been a wide spectrum of forecasts for the actual growth performance, with certain economists arguing that poor figures in the construction and manufacturing industry will have an adverse affect on economic statistics released tomorrow.
However, others have pointed to the sharp fall in unemployment and the excellent performance of the retail industry over Christmas as clear signs that there will be positive data on the economy, and have praised the government for their policies to rebalance the countryís economy.
Despite the positive performance of the UKís economy, recent surveys have suggested that workers across the UK remain downbeat about their financial situations.
Markit, conducted a survey to gauge consumer attitudes towards their finances and found that many were feeling the squeeze in their standards of living due to inflation consistently being higher than the growth of wages in the country.
“January’s survey highlights some light at the end of the tunnel for UK households, with falling consumer price inflation and better labour market conditions helping to bring down the squeeze on finances after five years of gloom,” said Tim Moore, a senior economist at Markit.
“Although the economic outlook remains upbeat, specific factors suggest that growth during the fourth quarter did not quite keep pace with the two previous quarters,” he said, citing a drop in construction output and flatlining industrial production.
“Fundamentally we would argue that an out-turn of 0.7% should not be a disappointment. The indicators are volatile and subject to revision while in any case there is no evidence whatsoever that the recovery is petering out.”
Think Tank capital economics reserved one of the most positive growth predictions, estimating it to have been a high 0.8% in the final quarter of 2013.
“While slightly less than the Bank of England’s monetary policy committee, for example, is expecting, this would still take annual growth in 2013 as a whole to 1.9%, the best performance since 2007,” they said.
And despite economists having their reservations about the poor performance of the construction sector during December, there have been positive indications that it is improving following the release of a report today.
A survey released by the Construction Products Association has indicated that demand for a multitude of building materials has risen substantially in the past few months,
And recent figures suggest that over 66% of manufacturing firms reported an increase in sales during the last quarter of 2013, compared to the two that preceded it.
And the CPA has moved to play down recent reports that the housebuilding sector in the country is floundering following a number of builders being laid off and supply failing to meet demand in 2013.
The CPA said that despite high demand, over 75% of constructors were not operating at full capacity, and has asked consumers to look at figures in the private building sector to attain a more positive picture of the industryís trajectory.
Noble Francis, the group’s economics director, said: “Of concern, however, manufacturers reported margins continue to be severely hindered by cost rises, especially in energy and transport fuel. In addition, manufacturers also reported that labour costs and materials costs rose in the fourth quarter,” he said.
Ian Rodgers, director of UK Steel, said the fourth quarter output was the highest quarterly level since the start of the recession. “This suggests that UK demand for steel has now turned the corner.”