CBI forecasts recovery for 2002

In its quarterly forecast, the business group said the economy will grow by a lower-that-expected 2% this year as a result of the global slowdown. But growth should increase next year to 2.5%, according to the CBI’s forecast.

‘Next year’s economic recovery will be driven by home demand led by the consumer and supported by higher government spending,’ said CBI associate director of economics Sudhir Junankar.

‘But the current imbalances in the economy will persist next year with manufacturing output up only modestly and trade still a significant drag on economic growth,’ he added.

And CBI director general Digby Jones used the announcement to again hit out at the government’s climate change levy. He said the levy was adding to costs, hindering job creation and not helping recovery.

Furthermore, the CBI said demand for UK manufacturers’ goods, both at home and abroad, had weakened substantially since the start of this year. Total order books are at their lowest level for nearly two and a half years and output is set to fall, the body warned.

The news follows a PricewaterhouseCoopers survey earlier this week which said the slowdown in the manufacturing sector had potentially devastating implications for the Midlands’ economy. The Big Five firm said urgent action was needed to protect the region from serious decline.


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