British industry group flags weakest factory exports since 2009
LONDON – British economic growth is at risk of slowing further and looks increasingly lop-sided, the British Chambers of Commerce said on Thursday after it reported that factory exports grew at their weakest pace since 2009 late last year.
The BCC said its quarterly survey of members – Britain’s largest regular private-sector sample of firms – pointed to potential trouble ahead and an economy too dependent on consumers and the housing market rather than exports.
“The real concern is that this period of two-tier growth becomes the norm rather than a blip,” BCC Director-General John Longworth said.
Britain’s economy grew just 0.4 percent in the three months to September – its joint-weakest rate for nearly three years – though growth for 2015 as a whole is still likely to exceed that in most of its peers.
BCC Chief Economist David Kern said that the survey’s fourth quarter data, coming after relative weakness in the previous quarter, showed risks that the pace of growth may slow further.
Last month the BCC forecast the economy would grow 2.5 percent in 2016 and 2017, similar to 2015’s rate and slightly higher than the average in a Reuters poll of economists.
The BCC said factory exports had effectively stagnated, something last seen in mid-2009, and manufacturers and services industries’ domestic sales and orders had fallen back to growth rates seen in late 2012 and 2013.
“While these latest figures demonstrate growth, it is clear that there are warning signs of potential trouble ahead,” Longworth said.
Firms were under pressure from increasing global uncertainty, tax compliance burdens and government plans to raise the minimum wage significantly, he said.
“Businesses are finding themselves chafed and stagnating.”
Other surveys have also pointed to soft growth, and on Wednesday financial data company Markit lowered its estimate of fourth-quarter growth to 0.5 percent from 0.6 percent following a fall in its measure of services sector activity.
The BCC survey was based on responses from more than 7,000 mostly small and medium-sized firms employing nearly three quarters of a million people, and was conducted between Nov. 9 and Nov. 30. -Reuters