Published: 09:12, 02 January 2020
| Updated: 09:13, 02 January 2020
The latest survey says the UK ended 2019 "in stagnation" in what was a rather gloomy picture of the economic landscape.
The British Chambers of Commerce’s Quarterly Economic Survey said the economy stalled "amid long term uncertainty, rising business costs and a slowing global economy".
However, it contradicts findings for the south east published recently which suggest business confidence is increasing.
The latest results of the survey – which is the largest of its kind in the UK and a leading indicator of GDP growth - found protracted weakness across most indicators of economic health in the final quarter of 2019.
Among the key findings were in the service sector, which accounts for almost 80% of UK economic output, which saw all its key indicators worsen compared to Q3 2019. These indicators remain well below their historic average.
While the balance of manufacturers reporting a rise in domestic and export sales improved slightly, the balance of manufacturers reporting increased export and domestic orders has now been negative for two consecutive quarters. This is the first this has happened since 2009 and 2011 respectively.
It also says investment intentions remain weak by historic standards, with the balance of firms in the manufacturing sector that plan to increase investment in plant and machinery dropped to its lowest level since Q4 2011.
Cashflow, a key indicator of the health of businesses, improved slightly from its lowest level in eight years but remains very weak across both manufacturing and service sectors.
Suren Thiru, head of economics at the British Chambers of Commerce (BCC), said: "The UK economy limped through the final quarter of 2019.
“The fourth quarter was characterised by a broad-based slowdown in the dominant services sector with all key indicators weakening in the quarter, amid sluggish household expenditure and crippling cost pressures.
“Despite some improvements, indicators in the manufacturing sector remain very weak by historic standards, and with indicators for domestic and export orders continuing to contract, the near-term outlook for the sector remains challenging.
“A faltering service sector together with listless manufacturing activity points to a downbeat out turn for UK GDP growth in the fourth quarter of 2019.”
Responding to the findings, Dr Adam Marshall, director general of the BCC, said: “The end of political deadlock at Westminster must also bring action to renew business confidence and tackle the prolonged stagnation that’s affecting so much of the UK economy. The government must use its new found majority to take big decisions to stimulate growth.
“If ministers take action to reduce up-front costs, move key infrastructure projects forward, and to help businesses on training, they’ll be rewarded with increased investment.
“However, they also must move quickly over the coming weeks to ensure that Brexit is done right. A clear future trading relationship with the EU is also crucial to many firms’ future investment and growth prospects.”
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More by this authorChris Britcher
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