The Quarterly Economic Survey results were described by the BCC as positive overall despite the fact that in both manufacturing and services most key balances fell in Q2 versus the Q1 figures. This is mitigated by the fact that Q1 was ‘extraordinarily strong.’
All key Q2 balances are stronger than long-term averages with three manufacturing balances at their all-time highs in Q2; domestic sales, profitability confidence and capacity utilisation
Services balances were not at any all-time highs in Q2 however, whereas in Q1 two balances were all-time highs.
One note of concern the BCC has highlighted is an ‘unwelcome’ dip in export and investment balances for both manufacturing and services, but they still remain above their average 2007 pre-recession levels.
In both manufacturing and services cash flow balances improved, intentions to raise prices receded and wage rise pressures cooled.
“The Q2 results confirm that the recovery is continuing at a satisfactory pace, though most Q2 key balances are lower than the unusually strong Q1 figures they remain strong by historical standards,” said BCC chief economist David Kern.
“However, progress towards rebalancing the economy is inadequate; the Q2 falls in all the export and investment balances are concerning, and are a stark reminder that the recovery is not yet secure,” he added.