Growth in UK service export sales slumped to its weakest rate since 2009 in the first quarter of the year, a major survey revealed today, as political uncertainty and a global slowdown weighed on firms’ activities.
The balance of firms reporting improved cashflow slid into negative territory for the first time since 2012 as key indicators of UK economic health weakened, according to a survey of 7,000 businesses by the British Chambers of Commerce (BCC).
A positive score indicates that more firms reported an increase than reported a decrease.
In response to the data the BCC, a national body which represents 53 accredited chambers of commerce from around the country, called on the government to lower burdens on businesses, saying new digital tax and pension auto-enrolment regulations were onerous.
The survey revealed that among manufacturers, the percentage of firms reporting an increase in domestic and export sales and orders dropped back to their 2016 levels, hitting 20 and 14 respectively.
The balance of firms who looked to invest in either plant and machinery or training also dropped in both sectors to their lowest level in eight years, as uncertainty over Brexit delayed their decisions.
In manufacturing confidence in the future fell to its lowest level since 2011, while it was at its weakest since 2016 in the services sectors.
Adam Marshall, director general of the BCC, said: “At the same time that firms are having to enact costly contingency plans [for a no-deal Brexit], the cost of doing business here in the UK continues to rise.”
“This week sees a new tax year with a number of changes adding to the upfront cost of doing business in the UK, including the introduction of Making Tax Digital and changes to auto-enrolment, leaving many firms facing more bureaucracy and new expenses.”
Suren Thiru, head of economics at the BCC, said: “Our latest survey suggests that UK growth nearly ground to a halt in the first quarter of 2019, with increasing anxiety over Brexit and weakening global economic conditions driving a significant deterioration in almost all the key indicators in the quarter.”