Cash Flow and Economic Growth Still Reeling From Cold Snap

17th April 2018.

While the weather in the UK finally warms up, new official data has revealed that the economy is still feeling the effects of the recent cold snap, according to the latest forecasts

The cold weather in February and March – nicknamed the Beast from the East – caused large parts of the economy to grind to a halt after heavy snowfalls were followed by flooding. Many sectors were hit hard by the adverse weather conditions, with many employees unable to get to work, supplies not delivered and customer turnout dramatically reduced. The construction sector was hit hardest, with many projects abandoned due to dangerous conditions along with an increased difficulty in getting raw materials transported across the country.

At the Credit Protection Association, our services were used to help many of our members dig their finances out of the snow. Our debt recovery services provided extra cash to make up for lost time and lost money.

John Hawksworth, PwC’s chief economist, said: “The last time we had such significant snowfalls, in December 2010, there was a marked dip in quarterly UK GDP growth. Construction output fell sharply and retail and leisure spending was hit in the run-up to Christmas. This was only partly offset by a sharp rise in energy consumption for heating.”

However, the this year’s freeze should have less of an impact, with the manufacturing data not showing a major hit, PwC said. The closely-watched purchasing managers index (PMI) for the sector remained steady for the first three months in growth territory.

Meanwhile, most economists expect growth in the second quarter to rebound strongly towards trend growth, as consumers spend the money they did not use before.

Policymakers and businesses should focus on “the underlying picture of continued moderate but steady UK growth”, Hawksworth said.

The ice has melted, the schools have reopened and it’s time for the economy to recover. Companies may still be reeling from the loss of business but there are ways to revive cash flow and make up for lost time.

At the Credit Protection Association, many of our members suffered at the hands of the unexpected snowfalls and icy roads. We heard anecdotes about failed deliveries, unhappy customers and demands of monetary compensation. Thankfully, our collections team was only too eager to assist, and our debt recovery services immediately recovered old debt for our members, freeing up the extra cash necessary to placate angry customers.

So while we wait for the economy to thaw, business owners should ensure they themselves are financially confident going into Spring.