Small Business Growth Still Too Slow
The British Chambers of Commerce’ Quarterly Economic Survey (QES) results for Q2 2012 show that whilst businesses are growing the rate of business growth is still weak.
Comprising responses from almost 8,000 small- and medium-sized businesses, the survey shows that despite the positivity of actual growth, the figures indicate a lower growth rate than in 2007.
The pace of the recovery, the BCC says, is both “sluggish” and “inadequate for a sustainable recovery”.
At home, domestic orders remain weak. One positive finding, however, is that the UK’s export market is looking favourable; service sector firms and manufacturers have reported a rise in export activity with the growth in exports of an encouraging level, similar to that of pre-recession rates.
John Longworth, Director General of the BCC, said of the results:
“While domestic growth continues to bump along the bottom, the silver lining is an increase in firms looking for export opportunities, and in many cases, with countries outside Europe. Economic growth should be the government’s main priority. As the eurozone crisis rumbles on, businesses are feeling the effects, and so growth is still weak.”
Impatient with the sluggishness of the last 5 years, Longworth continued, adding:
“Growth cannot wait. The government must take an imaginative and brave approach to stimulating the economy and helping businesses thrive. Headline grabbing u-turns on fuel duty are not enough to get the economy back on track. There must be a relentless determination to deliver Whitehall policies on the ground.”
The BCC’s Director General also pointed out that access to finance for businesses was still a barrier to growth;
“The creation of a business bank, for example, would ensure that new and growing companies can access the finance they need to invest in new products and services, export to new markets, and take on more staff.”
Other measures the BCC anticipates, with a lead from the Government, include renewed infrastructure development, highlighting that the construction of "robust" rail, air, maritime, energy and data networks could be a catalyst for investment, growth and job creation.
The BCC’s Chief Economist, David Kern, whilst disappointed with the glum figures, acknowledged that there was, overall, business growth, albeit weak growth. Kern also questioned the ONS’ recent figures that pointed to a contraction in GDP (See the news story CBI Predicts UK Economy Return to Growth in 2012)
For full details of the BCC’s Quarterly Economic Survey see the following reports: