CBI chief looks at firms to step up to the plate

John Cridland CBI girector general
John Cridland CBI girector general

BUSINESS leaders like John Cridland, pictured right, director general of bosses’ organisation the CBI say statistics show the economy is slowly improving.

Growth is forecast for both this year, albeit slowly, and, more especially next, when the minnions working for Mr Cridland suggest the economy will crawl back to the size it was in 2008.

But that doesn’t necessarily mean we will all be feeling like hanging out the bunting across Marlowes and dancing in the streets in celebration, for it seems that growth is likely to be confined to certain sectors and star performers.

If you work in manufacturing, where the company is active in exporting, or in areas where companies are investing, you stand more of a chance of success.

But if you work in sectors which depend on spending by consumers, you could be in for a more uncertain time.

When I recently had the chance to quiz Mr Cridland at a meeting where he was giving a lecture, I took the opportunity to ask him just where growth was going to come from.

One thing that has been puzzling me over the last few months is to be able to see just which areas would be driving growth. In my consumer-oriented world, bills are ever increasing while wages remain static. And put your money on interest rates going up in the spring. The result is less money to spend, which to me spells economic contraction, not expansion.

And if unemployment is going to keep heading upwards, that means fewer people have any spare cash to spend on anything other than the essentials.

But apparently, many companies have enough in reserves to be able to invest in new capital and products without the need to go to the banks.

And there is a massive opportunity to increase the growth of exports, if only firms were to look beyond the English-speaking world. Apparently, UK plc exports more to moribund Ireland than the massively growing BRIC countries of Brazil, Russia, India and China.

Mr Cridland admitted that economics remains a science that ‘makes astrology look respectable’ and there are risks to growth but he remains confident that Britain will be able to recover from what he called the ‘hangover’ that followed the credit binge.

He added that he hoped the Budget later this month would provide measures to kick-start further growth but implicit in his message was that firms need to step up to the challenge, too.

Companies need the confidence to invest, to think about how to export for growth and – he added – to take on apprentices to prevent the loss to long-term unemployment of a generation of 16-24 year-olds.