IoD cautions on over-reaction to good news on GDP

The chairman of the Institute of Directors in the West Midlands has cautioned against media-hyped “mood swings” that could distract business owners from the real task ahead.

Reacting to today’s surge of optimism prompted by the better than expected GDP figures, John Rider said: “We get overly depressed when we see a set of figures we don’t like, and so we shouldn’t get over-excited about one quarter’s figures – albeit encouraging as they are.

“This is a recovery that has been coming steadily for 12 months now and in the IoD’s quarterly magazine we have been running ‘Reasons to be cheerful’ to highlight that not all is doom and gloom.

“The bounce back in GDP growth is good news but not enough to pop the champagne corks. More than half of the quarterly increase is attributable to the Olympics and the reversal of the Jubilee effect in Q2.

“The key message is that we’re out of recession but still uncertain where we are going.

“We haven’t turned the corner, but we can see the corner.

“The IoD view is that growth will continue in Q4 but we have to recognise that there could equally be some quarters that see a step back in the coming year and we must not over react if that happens either,” he said.