Manufacturing exports slumped at the end of last year, and will continue to suffer in 2016, leaving Britain with a two tier economy that relies on consumer spending to drive growth, a leading business group has warned.
The British Chambers of Commerce said a survey of 7,500 firms found that manufacturing fared worse than the services sector and was “close to stagnation” after domestic and export sales fell to below their pre-recession levels in 2007.
The BCC said that without government action to improve workers’ skills, upgrade outdated infrastructure, and allow small firms access to the same cheap credit available to major businesses, “the UK economy could suffer negative consequences in the face of increasing global uncertainty”.
The finding – which echoes official figures showing a contraction in factory output at the end of last year – came after analysts said the impact of government spending cuts, jittery world markets and the prospect of an EU referendum vote had dragged down expectations of UK services growth this year.
The services sector, which accounts for more than three-quarters of economic activity and ranges from shops and hotels to banking, maintained its solid growth in the run-up to Christmas, but the Markit/Cips survey found that expectations for business activity over the next 12 months were the weakest for almost three years.
via The Guardian