The British Chamber of Commerce (BCC) believes the UK will avoid a triple dip recession.
The BCC’s Quarterly Economic Survey for Q1 2013 shows progress, with almost all major balances improving compared with Q4 2012.
British businesses are resilient, but many balances are still below pre-recession levels and the BCC still believes growth remains too low.
The new survey, made up of responses from more than 7,000 businesses, shows that most key balances in both the manufacturing and service sectors strengthened in the first quarter of 2013.
Export balances in services are particularly strong, with deliveries and orders near the all-time high in 1994. Business confidence and investment are also up, and cashflow, although still relatively weak, is now positive for both manufacturing and service sector businesses.
David Kern, BCC chief economist, said: “The improvement seen in most key balances in Q1 supports our view that UK output continued to grow in the early months of 2013. The survey reinforces our assessment that recent GDP figures published by the ONS have exaggerated the weakness of the UK economy and the volatility in output.
“If an announcement of negative growth in Q1 is misleadingly described as a triple-dip recession, confidence will again be damaged unnecessarily. While the results do confirm that the UK’s economic performance is inadequate, they also show areas of strength.”
John Longworth, director general of the BCC, said: “These results provide a glimpse of the as-yet-distant sunlit uplands of recovery.
Businesses up and down the country are working hard to drive the economy, create jobs and export, but they cannot accelerate this process alone.”
Longworth: “Although the progress seen in the first quarter of this year is modest, it is progress nonetheless.
“Business confidence has increased further, and it is really encouraging to see export orders and deliveries near to their record high levels in services.
“This showcases the determination and ambition of our businesses here in the UK, despite continued pressures both at home and abroad. But the fact remains that the economy is still not strong enough. The fall in most employment balances is disappointing, and reminds us that a strong labour market cannot be taken for granted.”