UK Economy Grows 0.5% in Q1 2019 Amid Brexit Delay
The UK economy experienced an unprecedented boost to the start of the year, with GDP increasing by 0.5% during Quarter 1 2019. While this is certainly a drop from the more substantial growth reported this time last year, it is actually more positive than many would have believed. In fact, the National Institute of Economic and Social Research forecast predicted a 0.4% growth. The economy performed much better than it had in the latter part of 2018, with just a 0.2% GDP growth in Quarter 4 2018, and actually did better than the Eurozone on the whole, where average growth was reported at 0.4%.
A Brexit Boost?
While there is a lot of negativity surrounding Brexit, it is believed that the proposal for Britain to withdraw from the European Union could have attributed towards this unexpected level of GDP growth. With a new trend for stockpiling — British companies purchasing large amounts of stock from EU-based suppliers in preparation for increased import tariffs following a no-deal Brexit — and for encouraging UK customers to ‘buy now, while stocks last’, could it be that this growth is actually a ‘worry boom’? The Office of National Statistics confirms that imports of unspecified goods from the EU have been high.
With such political uncertainty looming ahead, experts have been quick to brand this growth as short-lived, especially with businesses having been vocal about bringing forward activity to complete specific tasks and projects prior to the original Brexit deadline of 29th March. However, while it is true that this could be little more than perceived growth, it is also possible that the economy could be bouncing back. With household consumption growth standing at 0.7% — a level that typically wouldn’t be expected even with panic buying — it could be that things really are starting to improve for the UK.
Of course, with Brexit now scheduled for 31st October (an oddly appropriate date), what actually happens in terms of the future of the economy remains to be seen, with ongoing growth heavily dependent upon what sort of deal — if any — the Prime Minister is able to agree with the EU.
What Does This Mean for Contractors?
Regardless of whether this is an actual growth or a worry boom, the outlook seems pretty positive for contractors. Overall growth for both 2019 and 2020 is predicted to stand at 1.3% per year (assuming no Brexit complications, that is), according to the European Commission Forecasts. Due to this predicted ongoing growth, the ICAEW Economic Update report shows that continued low levels of unemployment are expected, with the number of people in work actually anticipated to rise by 0.5%. In addition, rates of pay are expected to grow by 2.8% this year alone, making this potentially one of the best years for contractors in terms of earnings and opportunities.
However, there is still a great deal of political uncertainty, and no one knows quite what will happen come October. Contractors are advised to continue seeking opportunities while also being aware that changes in business operations as a result of Brexit could affect hiring. You can keep up with the latest updates in relation to Brexit and contracting here at ContractRecruit.