The British Chambers of Commerce’s (BCC) Q1 Quarterly Economic Survey provides further evidence that the UK economy is continuing to grow. The results show that both export orders and sales in services are at new all time highs, and many key manufacturing balances are also at record levels, showing that growth is strengthening in the short-term.
However, the BCC believes that the recovery must become more balanced in the months ahead as it is still too reliant on consumer spending. Access to finance remains a critical issue for businesses as they look to expand and meet growing order books, and rectifying this is vital if we are to transform our economy from being merely good, to being truly great.
Key findings in the Q1 2014 Quarterly Economic Survey:
- For both manufacturing and services, all the major Q1 balances are stronger than their long-term averages, and most are higher than their 2007 pre-recession levels.
- Both export balances in the services sector rose in Q1, surpassing their Q4 all-time highs: export sales (+38%) and export orders (+39%).
- Six key manufacturing balances are at all-time highs. This continues a trend seen over the last three quarters where an initial spurt in manufacturing has developed into consistent growth: domestic sales (+38%), domestic orders (+42%), employment expectations (+40%), investment in plant and machinery (+37%), investment in training (+33%), and turnover confidence (+67%).
- Almost all the key balances in the services sector remain above their 2007 pre-recession levels.
- But some concerns still exist. There was a significant drop in the employment balance in the services sector (down 13 to +16%).
- While recent falls in inflation have dampened the concerns of firms, it remains the biggest concern for both manufacturers and service-based companies.
Commenting on the results, John Longworth, Director General of the BCC said:
“It is great to see another positive story as we enter the 25th year of our survey. Confidence is high and our members are determined to continue driving the recovery. We are brilliant at services and very successful at exporting our knowledge-based industries all over the world. This includes everything from accountancy and marketing through to literature and the IT sector.
“In addition, our dynamic, high-value manufacturing sector is once again confounding expectations, and going from strength to strength. But UK firms are ambitious, and more support is needed if we are to place the recovery on a sustainable, broader footing in the medium-term.
“We have witnessed many false dawns during the recovery, and external shocks still loom on the horizon. Given that over the next year or so we face political change at home and abroad, long-term policies that support our businesses as they look to grow and invest are crucial.