The economy according to White Van Man

Yet more ‘shock’ news about the UK economy today.
Except, as usual, it isn’t.
The Office for National Statistics said last month that the UK economy contracted by 0.5 per cent in the last three months of 2010 – in other words, we contracted a smidgeon more than we grew.
The chief economist at the ONS, Joe Grice, said then that 0.5 per cent of the figure could be accounted for by the impact of the big freeze from November until Christmas. So without that the economy was at a standstill.
Today, the ONS has revised the figure because more data has come in. It now says the latest estimate is that the economy contracted by 0.6 per cent, not 0.5 per cent in the last quarter of 2010.
But Mr Grice says that 0.1 per cent is within the margin for statistical error.
So, today’s analysis is probably not a shock at all, and may not even be accurate. But if you’re out there looking for doom and gloom I’m sure that’s what you’ll see.
What’s underneath the slowdown in the economy towards the end of last year can only be conjecture until a definitive analysis is done. However, you can put a cyclical spin on it – if you want to.
At least some of the growth the economy enjoyed last year will be down to companies stocking up on those goods and services they delayed spending on during recession.
I was chatting to Trevor Finn, the chief executive of the car dealer group Pendragon (which owns the Evans Halshaw and Stratstone chains), earlier this week and he was taking me through the way the car and commercial vehicle market has been operating.
He flagged up the re-emergence of White Van Man – an increase in businesses buying light commercial vehicles, which is usually a sure sign that growth is coming back again.
But he cautioned that at least some of this was a cyclical increase in sales brought on by people who had hung on to their Transits longer than normal because of recession. Now recession is over – and don’t forget we’ve been out of it for more than a year – they need to replace some seriously knackered vans.
If there’s no further growth in the economy sales could easily drop back down again.
You can’t draw absolute conclusions about the economy from one quarter of figures, whatever they say. It’s far too soon to conclude that the UK economy has gone into reverse, and what is happening to the economy now will largely be the result of economic events and inputs which happened anywhere between six and 18 months ago (something which a few headline-hungry politicians might care to remember).
As I’ve said before, an economy yo-yoing up and down is classic post-recession behaviour. Any van driver can tell you that.