Call for more help to boost growth
Additional measures to boost economic growth are needed, the British Chambers of Commerce (BCC) has warned, as the job of repairing British finances will take longer to complete than initially hoped.
The BCC's quarterly economic survey, covering 7,593 businesses across the UK, revealed that economic growth in the UK remains weak as sales at home and overseas stagnate.
However, the BCC, which represents 104,000 business members, expects gross domestic product between July and September to grow by 0.5% after three consecutive quarters of declining output.
BCC chief economist David Kern said: "The job of repairing Britain's public finances will take longer to complete than initially planned. But, if the Chancellor demonstrates firm commitment to a credible fiscal plan, additional spending policies aimed at creating growth will help preserve market credibility."
The BCC said it did not agree with the Office for National Statistics' "gloomy estimation" that the UK was in technical recession for three quarters but said any improvements were still "inadequate". Its survey showed worsening confidence and investment levels from both manufacturing and services firms.
Fewer firms are looking to invest in training and plant and machinery, the BCC added, while confidence in future turnover and profit has fallen to levels last seen at the end of 2011. While balances for export activity are still positive, indicating growth, the third quarter saw levels drop to a similar level as the end of 2011.
Meanwhile, domestic orders are also weak, with survey balances falling on the previous quarter in both manufacturing and services. The figures measuring whether firms have or are likely to take on new staff have also dropped in both manufacturing and services.
BCC director general John Longworth said: "Economic growth is weak and businesses are less confident and less likely to invest than they were at the beginning of the year. The BCC's survey results should be a clear signal to government that more needs to be done to stimulate growth alongside continued deficit reduction.
"Despite official estimates, we believe the economy is still growing, but it is slowing. We need immediate measures now to support confidence and investment, a radical long-term growth plan, and a continued commitment to deficit reduction."
The BCC proposed a "Growth Voucher scheme" offering 20,000 small businesses £5,000 worth of advice to jump start investment and expansion plans. Meanwhile, it urged the Chancellor to consider other measures to move Britain towards a new model economy, such as implementing plans to create a British Business Bank as well as far-reaching proposals to unlock infrastructure investment.