Business leaders in the West Midlands have said the revised improvement in GDP figures from 0.1% to 0.3% should not divert attention from the real challenges facing UK plc.

The UK made a faster than expected climb out of recession in the final three months of 2009 with growth of 0.3%.

The figure is an improvement on the meagre 0.1% advance shown by the Office for National Statistics’ (ONS) first estimate a month ago and ahead of the 0.2% expected by markets.

The rare good news for the beleaguered economy came after output from the UK’s services and manufacturing sectors was revised upwards.

The latest output figure - based on more than three-quarters of the data - confirms suspicions among many commentators that earlier estimates were underestimating the performance of the economy.

But Katie Teasdale, senior policy adviser at Birmingham Chamber of Commerce, said: "There is a need to ensure we avoid a double dip recession. The chamber’s quarter four research found that although service sector firms are seeing an increase in sales, growth in manufacturing is confined to the still fragile export market.

"It is crucial that the government seeks to boost confidence by increasing funding availability. The Chamber is in the process of finalising a major new petition against the planned rise in employer National Insurance Contributions - a clear ‘tax on jobs’.

"A worrying significant fall in business investment was revealed yesterday and government priority has to be to ease the tax burden on business to encourage growth and recruitment."

The UK’s powerhouse services sector - which accounts for 75% of output - performed much more strongly than first thought in the final quarter of 2009 with growth revised up from 0.1% to 0.5%. This is the strongest growth for services since before the recession began in the first three months of 2008.

Output from production industries was lifted from 0.1% to 0.4% with manufacturing registering growth of 0.8% - twice as fast as previously thought.

This was down to much stronger growth in sectors such as engineering, transport, metals and chemicals.

Figures for household spending provided with today’s figures also hinted at an upturn in consumer spending as the impact of record low interest rates and VAT cuts worked through the economy. Household expenditure rose by 0.4% over the quarter - the biggest rise since the opening three months of 2008.

Although the recovery is stronger than first estimated on today’s figures, revisions to previous quarters show that the recession was the deepest on record, with a 6.2% peak-to-trough slump exceeding the 6% fall seen 30 years ago in the early years of Margaret Thatcher’s leadership.