Economic Recovery Remains Fragile

Posted: 27th July 2011

The latest Quarterly Economic Survey from the British Chambers of Commerce (BCC) indicates that economic growth in the UK remains weak.

Each quarter, over 6,000 businesses – belonging to Chambers of Commerce in every region of the country – take part in the survey, which covers a wide range of issues, including home sales and orders, export sales and orders, employment prospects, investment, recruitment difficulties, cash-flow, confidence and price pressures.
Although likely to have been negatively affected by the reduced number of working days in the quarter, the results for the second quarter are more positive than those in the first three months of the year. They do, however, show that the UK’s economic recovery is fragile.
Manufacturers’ confidence in turnover and profitability improved in the second quarter, but remains at weaker levels than in the final three quarters of 2010. Confidence in the services sector remains weak. Businesses also continue to experience cash-flow difficulties. Despite marginal improvements in both sectors, cash-flow balances for both sectors are still in negative territory. In both sectors, exporting activity remains stronger than domestic market performance, which suggests a sluggish domestic market with any growth likely to come from overseas customers.
The gloomy picture was confirmed by official figures showing that growth has stalled, with the last quarter’s GDP showing a negligible 0.2 per cent increase.
If your business is experiencing financial difficulties, take advice sooner rather than later.