Recovery gathering strength but risks remain

The British Chambers of Commerce‘s (BCC) Quarterly Economic Survey (QES) shows that the economy has made further progress, but that there are still some risks at home and abroad that could derail the recovery.

BCC’s Quarterly Economic Survey for Q2 2013 shows further progress, with most key balances stronger than in Q1 2013. Service export deliveries balance rose to +36 percent, the highest level since the survey began in 1989.

UK business remains resilient, and confidence is rising, despite most balances remaining below their pre-recession levels in 2007 according to John Longworth, Director General of the BCC.

The QES shows that the economy has made further progress, but that there are still some risks at home and abroad that could derail the recovery. The survey, made up of responses from over 7,400 businesses, shows that most key balances strengthened in Q2 2013 compared with the previous quarter. The export balances remain strong, with the services export deliveries balance reaching its highest level (+36 percent) since our survey began. It is encouraging to see employment balances rise, after they fell in the previous quarter.

Despite these welcome improvements, most indicators remain below their 2007 pre-recession levels, and it is disappointing that cash flow remains weak, while service investment balances fell in the quarter.

The findings suggest that the economy will continue to strengthen gradually over the next year, with growth slowly improving. The results also demonstrate resilience among UK businesses, who continue to feel confident and are looking to invest and increase exports this year.

John says despite gloomy media headlines in recent months, this economic survey once again shows increased business confidence. UK firms are determined to make progress:

“The falls in the service investment balances and the weak cash flow balances in both sectors are a warning that economic growth could be slow, and a reminder that a sustained upturn cannot be taken for granted.

“It must be recognised that recovery will only be turbo-charged if we can create a truly enterprise-friendly economy here in the UK. That, in turn, requires swift delivery of the infrastructure boost promised in the Spending Review, more support for exporters seeking to enter new markets, far more action on finance for growing companies, and a relentless government commitment to enabling the private sector to generate wealth and prosperity.