Economic growth still too slow but exports up
Despite a further rise in exporting activity among both service sector and manufacturing firms, economic growth remains too weak, according to the latest Quarterly Economic Survey from the British Chambers of Commerce (BCC).
The survey for the second quarter (Q2) of 2012 shows that businesses are growing, but that balances across most measures have yet to return to pre-recession levels.
Comprising responses from 7805 businesses, the Q2 survey shows that there has been a surprisingly good improvement in exporting activity, suggesting that businesses are looking to overseas trade as a source of growth.
John Longworth, BCC’s Director General, urged the Government to take a bold and imaginative approach to boosting growth. He recommended measures such as the creation of a state-backed business bank and investment in infrastructure as critical to get the economy growing.
In detail, balances measuring exporting activity for the last three months among manufacturers rose seven points to +31%, and among service sector firms rose eight points to +24%.
The balance of both manufacturing and service sector firms reporting increases in forward-looking export orders increased.
Among manufacturers, the balance was up four points to +24%, and in the service sector up seven points to +19%, a level last seen in Q1 2007.
"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," Mr Longworth said. "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."