We found out at the end of October that the UK is in the longest recession since official records began in 1955. The official estimate is that in the third quarter of 2009, the economy continued to contract, with economic output decreasing by 0.4 per cent since the second quarter in 2009. This has been the sixth successive quarterly contraction.

However, worldwide there seems to be better news as most OECD nations have begun economic recovery and the IMF has revised its latest forecasts upwards for 2010 GDP growth across both advanced and emerging economies.

Also, in the East of England unemployment has stabilised. The region’s unemployment rate was 6.5 per cent in Q3 2009, which was unchanged from Q2 2009. However, there is little prospect of unemployment being substantially reduced as labour demand remains weak, with many businesses carrying substantial spare capacity.

In November, Insight East released its Autumn economic forecasts from the East of England Forecasting Model. The outlook is actually more optimistic than the Spring set of forecasts. The latest economic forecasts suggest 0.7 per cent growth in 2010 and 2.4 per cent growth in 2011. There is more optimism in terms of employment loss being less severe than was first projected earlier in 2009. Whilst current (Autumn 2009) forecasts suggest that the region may lose 98,000 jobs between 2008 and 2011, this is less severe than was forecast in Spring 2009 (167,000). Looking forward over the next few months, there are indications that business orders are beginning to recover, although not significantly or consistently enough to conclude that there is a sustained recovery underway. Businesses have continued to report excess capacity and are unlikely to undertake investment, expansion or recruitment until demand exceeds their capacity to supply and they are confident of a sustained recovery.

Contact Glenn Athey Insighteast@eeda.org.uk