New survey casts doubt on growth of UK economy
The UK economy is not out of the woods yet, according to a new set of survey data.
Economic growth may have slowed in the first three months of this year, according to figures released today by the British Chambers of Commerce (BCC).
Both manufacturers and service sector firms reported lower sales growth at home and abroad. The two sectors make up the vast majority of the UK’s economic output.
The survey stands in contrast with more optimistic survey’s such which have led many economists to expect higher growth this year. However, the BCC’s chief economist warned the survey may not necessarily mark a slowdown for the UK.
“It would not be surprising if the ONS [Office for National Statistics] reports an upturn in GDP growth, or at least an unchanged position, in the first three months of 2015,” said BCC chief economist David Kern.
“Our conclusions are by no means a cause for alarm, but they are a salutary reminder that the UK still faces obstacles on the path to sustainable, long-term growth,” said BCC director general John Longworth.
“Crucially, our survey demonstrates that businesses remain optimistic, though they expect to grow at a slightly slower rate over the coming months.”
The net balance – the percentage of firms who answered positively minus those that answered negatively – of manufacturers that reported a rise in domestic sales declined to 30 per cent. It was 36 per cent in the final three months of 2014.
Meanwhile, the net balance of service sector firms who reported improved sales to the UK dropped to 34 per cent from 38 per cent in the final three months of 2014. Manufacturing and services firms also reported weaker export sales.
The negativity of the survey was confirmed by a drop in orders, which dropped for both sectors both at home and abroad.