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April 15, 2016

BCC economic survey finds UK growth is "softening"

BCC economic survey finds UK growth is "softening"Recent concerns about the UK economy in 2016 are being echoed in the latest Quarterly Economic Survey from the British Chambers of Commerce.

The BCC survey is based on responses from over 8,500 firms in Q1 2016. It shows that growth in the UK economy has continued to soften in the first quarter, with most key survey indicators either static or decreasing.

Several key indicators for the services sector - the UK's main driver of economic growth - fell slightly this quarter, with domestic sales and orders reaching their lowest level for over three years. For manufacturing, domestic sales fell again and remain low in historical terms.

While some manufacturing sector indicators have shown slight improvements, these increases are from a very low base. Overall, the BCC says the Q1 figures suggest a static picture, with potential downside risks for UK economic growth ahead.

Dr Adam Marshall, BCC acting director general, said: "While the picture is static overall, there are clear indications that economic growth is continuing to soften. From sales and orders to confidence and investment intentions, many of the business indicators we track are at a low ebb."

David Kern, BCC chief economist, said: "These results are disappointing but not surprising. This is the inevitable consequence of mounting global and domestic uncertainties, but it is nevertheless concerning that the vibrant and dominant services sector is likely to face mounting challenges in the next few years. The mediocre employment balances are a warning that we cannot afford to be complacent about the continued dynamism of our labour market."

The BCC has described the findings as "a wake-up call for Westminster". Marshall said: "Further action is likely to be needed to support business confidence, encourage trade and underpin investment in the months ahead."

However, Kern added that "in spite of the headwinds facing our economy, Britain has major areas of strength that can make a sustainable recovery possible, if correct policies are adopted … Britain is still likely to grow faster than most other G7 economies in the next two to three years."

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