Business faces 'worrying' outlook
April 15, 2005
UK manufacturing and services industries have suffered a decline in sales and confidence, the British Chambers of Commerce (BCC) has said.
Domestic sales and orders fell for manufacturers, its quarterly survey said, but exports remained at their best levels for eight years.
Overall, the BCC said the results of its survey - covering 5,000 firms - had been "disappointing and worrying."
The BCC urged the Bank of England to be patient before raising rates again.
Threats to growth
The BCC's survey, which covered the first quarter of 2005, said that both the manufacturing and service sector had recorded their lowest domestic sales rating since the middle of 2003.
Confidence among manufacturing and service sector firms had also edged lower.
But there was some positive news. The balance of manufacturers reporting higher export sales rose to +26 from +20, the highest since the third quarter of 1996.
Despite the smattering of positive indicators, the BCC said the first quarter results were disturbing overall and highlighted the serious potential threats facing the manufacturing sector.
Risks facing the service sector, meanwhile, have also worsened, it said.
"It is clear that the economy is slowing and the business environment is becoming riskier and more difficult," said the BCC's director general David Frost.
It said the clamour for early interest rate increases was unjustified and potentially dangerous, particularly for manufacturing.
"Higher interest rates would depress the already very weak growth in consumer spending, and may damage the housing market," said David Frost.
"The MPC should not consider interest rate increases until August at the earliest."
Print this page