UK Growth remains weak - BCC Survey

The latest Quarterly Economic Survey released Tuesday by the British Chambers of Commerce (BCC) shows that the economy improved in the fourth quarter of 2012, with stronger balances seen in both the manufacturing and service sectors. The new survey, made up of nearly 8,000 business responses, shows that UK firms are confident and ambitious, but also indicates that growth remains weak and there are still economic challenges ahead.

Commenting on the results, John Longworth, BCC's Director General, urged the government to take bold and imaginative measures to boost growth that will help businesses of all sizes to deliver a lasting recovery throughout 2013 and beyond.

David Kern, BCC Chief Economist, added:

"These results show welcome progress compared with the third quarter, but many balances are still weak by historical standards. For both manufacturing and services, almost all the key balances are stronger than in Q3, but domestic balances remain well below their pre-recession levels in 2007. The marked increase in confidence in both sectors reinforces our view that the economy will record modest positive growth in Q4 2012. Fears that the economy returned to negative growth in Q4 2012 are not supported by our survey. Plans to raise prices are higher, notably in manufacturing, but it is questionable whether price hikes can be carried out in the face of weak demand.

"We expect modest GDP recovery in 2013 and 2014, but it is clear that UK growth remains inadequate and must be boosted further. The economic environment will remain challenging, both globally and in the UK, with a prolonged period of below-trend growth. But British businesses remain resilient and we are confident that, with the right policies, growth will gradually improve over the next few years."