Holidays Could Stall Economic Growth
Byline: HUGH MORGAN WILLIAMS
YOU could be forgiven for thinking this week was in the middle of the Christmas holidays. Having just celebrated the most holy day in the Church of England's calendar with a four-day break, we now have a few days to recover before another four-day festival in honour of the marriage of Prince William to Catherine Middleton.
The conjunction of these four-day breaks mean that many of us have decided to make a 10-day break of it, with only the sacrifice of three days holiday. Or in supermarket parlance, ten for the price of three.
However, this enforced shutdown of the economy could have dangerous consequences. Manufacturing companies are already forecasting a torrid April as a result of this extended leave. Car companies that rely on Japanese components are seeing this break as something of a relief as stocks of parts continue to decline in the wake of the Japanese tsunami, and the ongoing problems as a result of the Fukushima nuclear emergency.
Car companies have already announced extended shutdowns and economists
are legitimately wondering where the economy is heading.
We have had a number of special factors that have influenced output in the last six months, that have contributed to unprecedented volatility in the calculation of economic growth.
There was the December snow, the impact of much higher oil prices due to the growing instability in the Middle East; we have had the tsunami and now a Royal wedding on the back of our later than usual Easter break. Coupled with all that, two more Eurozone countries require a bailout from us all.
It would not be a great surprise if we had another quarter of slightly negative growth as a result of these exceptional factors. …