Better export sales fail to spark UK economic growth, says British Chambers of Commerce Survey
13 October 2017
British export sales and orders improved during the last three months contributing to overall ‘muted growth’, according to the latest British Chambers of Commerce (BCC) Quarterly Economic Survey.
The survey, based on replies from more than 7,100 businesses, says stronger recent economic growth in several key markets has helped demand for UK products.
The proportion of manufacturers reporting better export sales rose from +27 to +29, and export orders from +20 to +24, the highest level since Q1 2015.
However, for services businesses, exports remained ‘fairly flat’, with +14 of firms reporting better overseas sales, a one point rise from the previous quarter, and orders at +8, a one point fall.
Manufacturing sector confidence rose slightly, with +51 of firms confident that turnover will increase during the next 12 months and profitability confidence at +34.
The proportion of expecting their goods prices to increase during the next three months rose from+34 to +35, driven mainly by raw materials prices.
Confidence among services businesses remains static, with the +40 confident of improved turnover and +30 confident of profitability unchanged. Both balances are below pre-EU referendum levels.
The percentage of services firms expecting their prices to rise during the next three months was unchanged at +28, above the historical average.
BCC says that the “uninspiring results’ emphasise the need for next month’s Autumn Budget to boost the economy by addressing issues hindering growth, including skills gaps and aging infrastructure and called on The Bank of England not to raise interest rates.
BCC director general, Dr Adam Marshall, says: “The chancellor’s Autumn Budget is a critical opportunity to demonstrate that the government stands ready to incentivise investment and support growth.”
BCC head of economics, Suren Thiru, said:“Against this backdrop, it seems extraordinary that the Bank of England is considering raising interest rates. We’d caution against an earlier-than-required tightening in monetary policy, which could hit business and consumer confidence and weaken overall UK growth.”
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