Growth is on the way

Aug 21 2006 By Jon Griffin

THE West Midlands economy will enjoy growth of up to 2.5 per cent by 2007 -ending a period of below par business investment, a survey shows.

A new report by business advisers PricewaterhouseCoopers LLP shows investment bounced back in the first quarter of 2006, indicating the economy will continue to grow steadily in 2006-07. The report says: "Despite relatively strong and stable economic conditions, the growth in business investment has been disappointingly low in recent years, particularly during 2005 when business investment in the UK seemed out of step with other developed European countries.

"While it accounts for just 10 per cent of total UK GDP, business investment is an important economic indicator and this under- performance had led to some uncertainty about the strength of the UK economy."

According to PricewaterhouseCoopers' UK Economic Outlook report, the West Midlands economy will continue to grow in the coming year - from around 1.5 per cent in 2005 to approximately 2 per cent in 2006 and 2.5 per cent in 2007.

David Waller, Midlands chairman of PricewaterhouseCoopers LLP, said: "Businesses are more inclined to invest in R&D, technology or new product introductions when the economic outlook is good.

"While we shouldn't overstate the significance of business investment levels to the performance of the overall economy, this sign of an upturn is good news for the Midlands economy. While other parts of the economy are likely to remain relatively flat in 2006-07, particularly in areas like consumer spending and Government spending, combined with the lack of any net gain from export/import activity, this upturn in business investment is all the more significant."