So, what is really happening...

We see a lot of figures regarding GDP, unemployment and so on but the real driver of the economy are small businesses and this is a sector that I know very well.  I have many small businesses as clients and I meet with 50 of them from all sectors every week for a breakfast.  These business come from all over Kent and therefore represent a good cross section of the Kent economy.  OK, fair enough - they are at the quality end of the market and are all motivated and committed enough to get out of bed at 5am every Friday to network with other businesses, not all people are prepared to do that.

A chart (from the USA) demonstrating the growing economic importance of small businesses, what is true there is true here.

I have previously highlighted the way the GDP figures these days are not a reliable indicator of economic activity, the public sector adjustments exaggerate what is actually happening.  Hence why I prefer to use the feedback I am getting at my breakfasts as a better guide to what is happening at least locally.

It is good news.  Oh, it is tough, yes - no question about that.  Some industries such as construction are having a terrible time of it but that is not the whole story.   The double glazing and conservatory business I speak to is booming, his highest ever orders.  The electrical wholesaler is having his best ever year.  The sewing machine retailer is having one if his best ever years.  In financial services the mortgage man is finding it slow but the investment adviser - me, I am having my best ever year.  The estate agent is desperate to find more properties to sell.  The plumbers and electricians are doing OK while the retailer is expanding his shop empire while selling lots of quality bottled ales and wine.

Then we come to the insolvency practitioner. You would have thought that in the current climate they would be raking it in.  Bad news for some is good news for others.  Well, they are doing OK but things could be better for them given we are in the depths of the worse financial crisis since the 1920's.  They told me that insolvencies are back down to the lowest level since the crisis began, the second quarter 2008..... But they are not downcast about it, they are nice people who are in the business of helping businesses survive and have played their part in reducing bankruptcies. 

So we have a double dip recession but unemployment has been going down.  Many businesses are thriving.  This is a very strange recession this being the case.  Why is this?

Flexible labour markets and common sense are the big players here.  Businesses have survived and kept going through some terrible times because they have been sensible and their employees have been sensible.

At the start of this crisis, at the time when Brown was recklessly handing out public sector pay rises and taking on more staff, businesses and their employees were doing the right thing to protect jobs, agreeing to short-time working, pay freezes and even pay cuts. 

If we were still in the 'bad old days' when trade unions ruled the roost or the nuttier end of Labour had their way over more so called 'job protection' then we would certainly be seeing unemployment going through the roof and the only business doing well would be the insolvency practitioner and for the wrong reasons.

So yes, things are difficult but let us remember that there is a real and vibrant economy regardless of what the figures say.