With domestic UK demand remaining muted, the UK’s economic growth is mainly due to strong global trading conditions, the Director General of the British Chambers of Commerce (BCC) Dr Adam Marshall has suggested.
Commenting on the BCC’s latest Quarterly Economic Survey (QES), he called on the Government to demonstrate that it can do more than negotiate Brexit by putting in place the fundamentals needed for business to thrive at home.
“At a time when firms face stratospheric up-front costs, the apprenticeship system is in crisis, roads are being allowed to crumble, mobile phone and broadband ‘not-spots’ are multiplying, and businesses are being blocked from hiring talent via arbitrary visa caps”, he said, “it’s obvious that the key to improved productivity and competitiveness lies in getting the basics right.”
Based on responses from 7159 businesses across the UK, the QES shows that UK economic growth remained subdued in the first quarter (Q1) of 2018, despite a strong export performance.
In that quarter, the balance of firms in the manufacturing sector reporting increased domestic sales fell from +23 to +17, which was the lowest figure recorded since 2016 Q4.
Domestic orders in 2018 Q1 fell from +18 to +16.
More positively, the balance of firms reporting increased export sales rose from +25 to +30, while export orders rose from +20 to +28. Both balances are, the BCC points out, at their highest level since 2014 Q2.
In the services sector, the balance of firms reporting improved export sales rose from +12 to +13 with orders up from +7 to +10. Domestic sales remained at +20, while domestic orders rose from +14 to +16.
Also commenting on the results was BCC Head of Economics, Suren Thiru, who noted that cash flow is increasingly an issue for businesses under pressure from a combination of high upfront costs, subdued financing levels and unfair payment practices.