Economy growing but recovery fragile, says BCC

 
City A.M. Reporter
Britain's economy grew very slightly in the second quarter and a slowdown in export demand suggests the recovery is fragile, a survey showed.

The British Chambers of Commerce (BCC) - which represents companies employing around one in six workers - said the rebalancing of the economy was not yet strong enough, and that firms faced additional challenges amid signs of a slowdown in the global economy.

The BCC said its latest survey indicated the economy expanded by 0.3 per cent between April and June - but the figures were compiled before disappointing official data on industrial and construction output hinted at an even weaker second-quarter performance.

The balance of firms in the services sector reporting a rise in domestic orders rose to nine per cent in quarter two from five per cent in quarter one - the highest in a year. But the export balances showed only a small improvement.

In manufacturing, which has so far been the main driver of Britain's recovery, the home sales balance jumped to 18 in quarter two from 8 in quarter one, but domestic orders were at their weakest in more than a year and the export balances were also softer.

BCC chief economist David Kern said that the results were positive given that there had been fewer working days in the quarter, but admitted that the outlook was uncertain.

"Businesses and consumers will have to cope with acute pressures in the short term and the economy is still very much at risk," he said.