Economic growth still too slow, warns BCC

Tuesday, 03 July 2012 07:55

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UK businesses are growing, but the pace is sluggish and inadequate for a sustainable recovery, according to the British Chambers of Commerce (BCC).

The BCC’s latest quarterly economic survey, comprising responses from 7,805 businesses, claims that economic growth remains too weak.

While many of the balances are in positive territory, suggesting growth, they are still below levels seen before the recession in 2007.

John Longworth, BCC’s director general, urged the Government to take a “bold and imaginative approach” to boosting growth.

He recommended measures including the creation of a state-backed business bank, and investment in infrastructure as critical to get the economy growing.

The study also indicates, however, that there has been an improvement in exporting activity, suggesting that businesses are looking to exporting as a source of growth. But domestic orders are weak, showing little net overall change.

There was a mixed picture on employment, the BCC said. Asked whether they had taken on staff in the last few months, the balance of manufacturing firms hiring remained the same as last quarter at 16 per cent, but the balance of service sector firms that had taken on staff rose six points to 10 per cent.

And while the number of manufacturing firms looking to recruit more staff in the next few months fell, service sector firms anticipated taking on more workers.

The survey also found that business confidence is still lower than pre-recession levels.

Mr Longworth said: “While domestic growth continues to bump along the bottom, the silver lining is an increase in firms looking for export opportunities, and in many cases, with countries outside Europe.

“Economic growth should be the Government’s main priority. As the Eurozone crisis rumbles on, businesses are feeling the effects, and so growth is still weak.”

He added: “Headline grabbing U-turns on fuel duty are not enough to get the economy back on track. There must be a relentless determination to deliver Whitehall policies on the ground.”

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