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Q2 survey finds "challenging business conditions"

13 July 2017

Q2 survey finds "challenging business conditions"The latest Economic Survey from the British Chambers of Commerce concludes that the UK economy grew at a "subdued rate" in the second quarter of this year.

Based on responses from over 7,700 businesses, the survey by the British Chambers of Commerce (BCC) reveals that both the service sector and manufacturing saw static growth in the past quarter. However, the picture is not all doom and gloom.

Confidence across the board held fairly steady in the second quarter, according to the report. The balance of manufacturers confident that turnover would improve over the next 12 months rose from +44 to +46, and the balance for services from +39 to +40.

Export sales and orders in the manufacturing sector remain solid and well above historical averages. However, export activity only increased marginally in the services sector and still remains below historic levels.

Domestically, the services sector continues to struggle and consumer-facing industries such as retail outlets and hotels reported weaker growth rates compared to B2B businesses.

Other key findings include:

  • In manufacturing, the balance of firms reporting increasing domestic sales held steady at +20, while domestic orders fell slightly from +16 to +15;
  • In services, the balance of firms reporting increasing domestic sales fell from +22 to +19 and domestic orders fell from +19 to +15;
  • Manufacturers report continued pressure from the price of raw materials, with 60% reporting this as the cause of price increases (down from 76%).

"For many businesses growth is static at best, and at worst, beginning to slow," said Adam Marshall, BCC director general. "It's time for the economy to be put back at the heart of the agenda, with a focus on creating the best possible environment for business growth all across the UK."

He added: "Government must play its part by tackling the issues that hold businesses back, including labour shortages, weaknesses in our physical and digital infrastructure, and high upfront costs which dampen investment intentions and firms' growth potential. Any talk of higher business taxes to pay for politically-motivated spending must be quashed swiftly, to avoid undermining business confidence further."

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