Growing economy – but is it boom or gloom for you?

The beleagured British economy is growing – just. Official figures show a rise in GDP of 0.6 per cent, the first time that the economy has grown for two successive quarters since 2011.

And for the first time in three years, all four main planks of the economy are showing signs of improvement, including manufacturing and construction – although the services sector continues to show the strongest performance.

Prime Minister David Cameron says the figures show Britain is on the right track and “building an economy for hard-working people”. Labour’s Ed Balls says the growth is welcome and long overdue, but says most people will not feel any benefits.

“Families on middle and low incomes are still not seeing any recovery in their living standards,” he said, while economists warned that real pay was still falling, bank lending was sluggish, and many consumers were still struggling with debt.

Business leaders were far more bullish, talking of more confidence about the future and a willingness to invest, although CBI Deputy Director General Neil Bentley warned that underlying conditions were still weak, and “the potential for getting knocked off course remains”.

Read more: UK 'holding its nerve' with 0.6 per cent growth

Today’s economic growth figures are encouraging. We are on the right track – building an economy for hardworking people.

— David Cameron (@David_Cameron) July 25, 2013

So what do small businesses really feel? Are they confident that prospects are improving, and more encouraged to expand? For Alastair Maclean, general manager of Stag bakery in the far-flung Western Isles, things have been feeling better for several weeks.

His company is looking to export traditional Scottish biscuits to new markets in Scandinavia and Canada. “We are seeing a bit of an uplift, you do get a feeling that things are on the up,” he says.

Although people are still scrimping on basic items, he says they are still finding the cash for a few treats, although “people have to be convinced to spend, and if all they are hearing is doom and gloom, they probably won’t.”

To be honest, anything better than last year impacts our business positively. Bash Redford, Forza Win

At the other end of the country, Rebecca McGuire has seen rapid growth in Yog, her small chain of frozen yoghurt shops. They started in 2008, at the height of the recession, but have managed to treble their business in the last year alone, with 50 employees, and are now expanding into Spain and the far east.

“We still have to be pretty cautious,” she says. “We wouldn’t rush into opening a shop, anywhere.” But some areas look like they have been pretty protected from the harsh winds of recession.

“In London, space is in such huge demand, there’s a huge demand for retail stores. If something comes up, it’s snapped up straight away – there are almost bidding wars. It’s such a competitive market and there are lots of investors from overseas.”

Bash Redford set up his pop-up events company Forza Win a year ago, with the aim of providing Londoners with an affordable and unique night out. So have things been a struggle to get off the ground?

“We started in a time of economic turmoil, so to be honest anything better than last year impacts our business positively,” he says. “That said, we have just launched our most expensive event to date, in terms of ticket price, and our rooftop pizzeria has been completely sold out, so in that sense, yes, we are better off than we were a year ago.”

From start-up to success

The mail order snack box enterprise Saviour Snacks has been going just a few months, thanks to a new government scheme designed to get start-ups off the ground with tax and capital gains rebates for investors.

“If you can make a business succeed with the economy in the state it’s in now, you’ll be laughing when it grows,” says Sarah Dembitz. “If you believe in the idea and the product then you will sell it and you will get investors to buy into you.”

And she says she has detected a genuine mood among the public to support independent businesses, rather than huge multinationals which have been getting such a bad press over issues like tax avoidance and outsourcing jobs abroad.

“There is a real feeling out there that people want to support the local guy, be loyal to small businesses where they can and we are definitely feeling that,” she says.

But before anyone gets too optimistic, economists warn that the growth figures, such as they are, are still pretty mediocre. GDP is still 3.3 per cent below the level it was before the financial crisis in 2008: things are by no means back to normal yet.

And if you do not feel much better off than you did six months, or a year ago, then that could be because any growth in wages is still lagging well behind inflation – so the price of staple goods like food, drink and fuel is going up faster than income.

That economic feel good factor might be a fraction closer, then, but it remains as brief and ephemeral as the British summer.