Britain's bosses tell the ONS: it's bad, but not a recession

Corporate leaders fear GDP data will panic consumers while CBI suggests manufacturing remains robust

Business leaders cast doubt on yesterday's gloomy GDP figures, arguing that the slump they suggested was not only at odds with their experience but also threatened Britain's fragile economic confidence.

Click HERE to view graphic

Meanwhile, upbeat figures from the CBI on the manufacturing industry made the official numbers look even more overly pessimistic.

Sir Martin Sorrell, chief executive of WPP, the world's biggest advertising agency, told The Independent that clients had not cut their marketing spend. "The UK is ok for us," he said, although he admitted there was some evidence of money being pushed to the second and third quarters because of the Olympics and Euro 2012 football tournament.

But it was builders and engineers who appeared most dubious about the Office for National Statistics' claims of a 3 per cent contraction in construction.

Mark Clare, chief executive of the housebuilder Barratt, declared: "There is no doubt that the housing industry has seen greater stability in the current market conditions. Barratt has been opening new sites on newly acquired land which have been selling well with strong customer demand."

Gordon Payne, managing director of Teesside's Darchem Engineering, added: "We've seen substantial growth of between 10 and 15 per cent in the first quarter, much of it driven by exports. We need to expand our production facilities." Peter Duncan, managing director of Cressall Resistors, a maker of industrial power resistors, in Leicester, added: "We had a very good first quarter. The overall trend is still very positive."

Sian Sutherland, the entrepreneur behind the Mama Mio beauty brand, who numbers Selfridges, John Lewis and other department stores as clients, said: "Although our US growth is better than in the UK, we are still seeing good increases in our sales over here."

Industry groups lined up to question the initial estimate from the Office for National Statistics (ONS) that the economy contracted by 0.2 per cent in the first quarter. David Kern, chief economist of the British Chambers of Commerce, declared thefigures "unduly pessimistic," adding: "Many commentators will question the accuracy of the data." He pointed out that this first estimate of GDP is based on only 40 per cent of total transactions, leaving a wide scope for error. Yesterday's initial GDP estimate will be revised twice in the coming months before it is finalised.

Ian McCafferty, the CBI's chief economic adviser, cast particular doubt on the services sector estimate of just 0.1 per cent growth.

He worried that headlines about recession could hit consumer spending. "Clearly there is a risk, given that confidence is fragile, that this could hit it further," he said.

The retailer Theo Paphitis added: "Let's not talk ourselves down."

The CBI's survey yesterday showed an increase in orders and output from industrialists. Some 8 per cent more companies reported an increase in orders in the first quarter, than a decrease – giving a so-called balance of plus 8. Furthermore, British manufacturers are expecting the strongest improvement in orders in 12 years over the next three months. A balance of plus 24 expect orders to increase in the next three months, the highest reading since April 1997.

Although many companies did not recognise the GDP figure, there were also others that did. Marc Mendoza, chief executive of the ad buying agency MPG Media Contacts, said some clients were delaying decisions about marketing campaigns. "We haven't seen a market as 'late' as this for a very long time. There is no visibility."

The ONS's chief economist, Joe Grice, said the report was based on a survey of 8,000 companies and had been rigorously compiled.

View from the front line: Tycoons talk

Ad man

Sir Martin Sorrell, WPP

'The UK is OK. Some companies are deferring spending because of the Olympics'

Make-up mogul

Sian Sutherland, Mama Mio

'Our US growth is better than in the UK, but we're still seeing good growth here'

Airport boss

Jose Leo, BAA

'The GDP figures show how much we need to to be connected to emerging nations like Brazil, Russia, India and China'

Retail chief

Theo Paphitis, entrepreneur

'This is no different to where we've been since 2009. Let's not talk ourselves down'

Big builder

Mark Clare, Barratt CEO

'We're opening new sites and properties are selling well. The market's stabilising'

Start your day with The Independent, sign up for daily news emails
Arts and Entertainment
Ben Stiller as Derek Zoolander in the leaked trailer for Zoolander 2
film
Sport
footballArsenal take the Community Shield thanks to a sensational strike from Alex Oxlade-Chamberlain
Arts and Entertainment
Gemma Chan as synth Anita in Humans
film
News
Keeping it friendly: Tom Cruise on ‘The Daily Show’ with Jon Stewart
people
Arts and Entertainment
Ensemble cast: Jamie McCartney with ‘The Great Wall of Vagina’
artBritish artist Jamie McCartney explains a work that is designed to put women's minds at rest
News
Republican Presidential Candidate Donald Trump
people
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: DBA Developer - SQL Server

£30000 - £35000 per annum: Recruitment Genius: This is an exciting opportunity...

Recruitment Genius: Customer Service Administrator

£13000 - £15000 per annum: Recruitment Genius: Are you passionate about custom...

Recruitment Genius: Dialler Administrator

£22000 - £25000 per annum: Recruitment Genius: Main purpose: Under the directi...

Ashdown Group: Contracts Manager - City of London

£35000 - £37000 per annum + benefits : Ashdown Group: Contracts Manager - City...

Day In a Page

Turkey-Kurdish conflict: Obama's deal with Ankara is a betrayal of Syrian Kurds and may not even weaken Isis

US betrayal of old ally brings limited reward

Since the accord, the Turks have only waged war on Kurds while no US bomber has used Incirlik airbase, says Patrick Cockburn
VIPs gather for opening of second Suez Canal - but doubts linger over security

'A gift from Egypt to the rest of the world'

VIPs gather for opening of second Suez Canal - but is it really needed?
Jeremy Corbyn dresses abysmally. That's a great thing because it's genuine

Jeremy Corbyn dresses abysmally. That's a great thing because it's genuine

Fashion editor, Alexander Fury, applauds a man who clearly has more important things on his mind
The male menopause and intimations of mortality

Aches, pains and an inkling of mortality

So the male menopause is real, they say, but what would the Victorians, 'old' at 30, think of that, asks DJ Taylor
Man Booker Prize 2015: Anna Smaill - How can I possibly be on the list with these writers I have idolised?

'How can I possibly be on the list with these writers I have idolised?'

Man Booker Prize nominee Anna Smaill on the rise of Kiwi lit
Bettany Hughes interview: The historian on how Socrates would have solved Greece's problems

Bettany Hughes interview

The historian on how Socrates would have solved Greece's problems
Art of the state: Pyongyang propaganda posters to be exhibited in China

Art of the state

Pyongyang propaganda posters to be exhibited in China
Mildreds and Vanilla Black have given vegetarian food a makeover in new cookbooks

Vegetarian food gets a makeover

Long-time vegetarian Holly Williams tries to recreate some of the inventive recipes in Mildreds and Vanilla Black's new cookbooks
The haunting of Shirley Jackson: Was the gothic author's life really as bleak as her fiction?

The haunting of Shirley Jackson

Was the gothic author's life really as bleak as her fiction?
Bill Granger recipes: Heading off on holiday? Try out our chef's seaside-inspired dishes...

Bill Granger's seaside-inspired recipes

These dishes are so easy to make, our chef is almost embarrassed to call them recipes
Ashes 2015: Tourists are limp, leaderless and distinctly UnAustralian

Tourists are limp, leaderless and distinctly UnAustralian

A woefully out-of-form Michael Clarke embodies his team's fragile Ashes campaign, says Michael Calvin
Blairites be warned, this could be the moment Labour turns into Syriza

Andrew Grice: Inside Westminster

Blairites be warned, this could be the moment Labour turns into Syriza
HMS Victory: The mystery of Britain's worst naval disaster is finally solved - 271 years later

The mystery of Britain's worst naval disaster is finally solved - 271 years later

Exclusive: David Keys reveals the research that finally explains why HMS Victory went down with the loss of 1,100 lives
Survivors of the Nagasaki atomic bomb attack: Japan must not abandon its post-war pacifism

'I saw people so injured you couldn't tell if they were dead or alive'

Nagasaki survivors on why Japan must not abandon its post-war pacifism
Jon Stewart: The voice of Democrats who felt Obama had failed to deliver on his 'Yes We Can' slogan, and the voter he tried hardest to keep onside

The voter Obama tried hardest to keep onside

Outgoing The Daily Show host, Jon Stewart, became the voice of Democrats who felt the President had failed to deliver on his ‘Yes We Can’ slogan. Tim Walker charts the ups and downs of their 10-year relationship on screen