Business calls for election focus on economic growth

9 Apr 15

Policies to boost the economy should be at the heart of the general election campaign, business leaders said after a survey of more than 7,500 companies revealed weaker growth in the first three months of the year.

The British Chambers of Commerce’s quarterly economic survey, which is based on responses from firms in both the manufacturing and service sectors, reported weaker results in both areas between January and March. Manufacturing firms reported a decline in both sales and orders by 6 percentage points and 11 percentage points respectively. Service firms also reported lower output, with sales lower by 4 points and an 11 percentage point fall in orders.

BCC director general John Longworth said that although economic growth was forecast to continue, the figures showed that the path to sustainable long-term expansion would be ‘bumpy and challenging’.

He stated: ‘As the general election approaches support for growth must be at the heart of the debate, with a much needed focus on boosting exports and business investment.’

It was not a huge surprise to see slightly weaker numbers at the start of the year, particularly after the sectors had reported a very strong fourth quarter, Longworth said.

‘Our conclusions are by no means a cause for alarm, but they are a salutary reminder that the UK still faces obstacles on the path to sustainable, long-term growth.

‘Unless support for exports and business investment is placed at the heart of any future government, consumption and government spending will continue to drive an economic recovery that is unbalanced and unsustainable.’

Chief economist David Kern added that most performance indicators had weakened in the first quarter of the year.

‘It is disappointing that most first quarter balances recorded quarterly falls, and some are lower than the 2007 pre-recession levels, however the balances still point to solid economic growth continuing in 2015.

‘While the national balances of our survey reflect accurately the overall momentum in economic activity, they do not necessarily replicate quarterly gross domestic product movements as published by the Office for National Statistics. It would not be surprising if the ONS reports an upturn in GDP growth, or at least an unchanged position, in Q1 2015. But the UK recovery remains unbalanced – growth is still too reliant on consumer spending and the current account deficit remains unsustainable.’

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