‘Wake-up call’ for Westminster over economy fears
- Credit: Archant
Economic growth is “static” amid mounting global and domestic uncertainties, according to new research.
A survey of over 8,500 firms by the British Chambers of Commerce (BCC) showed historically low confidence in turnover and profitability.
Domestic sales and orders in services firms fell in the first quarter of the year, reaching their lowest level for three years.
Manufacturers also reported a fall in home sales, which remain low in historical terms.
The BCC said the study suggested a static picture on the economy, which was facing a number of potential downside risks.
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Acting general secretary Dr Adam Marshall, said: “Our latest survey results suggest that the UK economy is in a holding pattern. While the picture is static overall, there are clear indications that economic growth is continuing to soften. From sales and orders to confidence and investment intentions, many of the business indicators we track are at a low ebb.
“The softening environment should be a wake-up call for Westminster. Further action is likely to be needed to support business confidence, encourage trade and underpin investment in the months ahead.”
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David Kern, BCC chief economist, added: “These results are disappointing but not surprising. Although GDP growth for the previous quarter was upgraded slightly, our survey points to a slowdown.
“This is the inevitable consequence of mounting global and domestic uncertainties, but it is nevertheless concerning that the vibrant and dominant services sector is likely to face mounting challenges in the next few years.
“The mediocre employment balances are a warning that we cannot afford to be complacent about the continued dynamism of our labour market.”
Shadow business secretary Angela Eagle said: “The picture of softening growth and fading confidence shown in this survey reflects in my conversations with businesses up and down the country.
“It is clear that the warning lights are flashing red on the economic dashboard. At his shambolic Budget last month, the Chancellor had to downgrade projects for growth, investment, and wages.
“On Friday we heard that the last quarter saw the biggest decline in productivity since the global crash in 2008. The Chancellor’s ‘plan’ is clearly not working.”