Economy stabilising at 'concerningly low levels ' - British Chambers

The Quarterly Economic Survey (QES) for Q4 2022conducted by the British Chamber of Commerce (BCC) shows key economic indicators have stabilised at concerningly low levels, following significant declines in Q3. ?

The survey of over 5,600 firms - 92 per cent of whom are SMEs - reveals business confidence, conditions and sales have stabilised at low levels, while inflation remains the top external factor of concern.

The research took place between November 7 and November 30, across the period the Government 's Autumn Statement was announced.

The percentage of firms reporting increased domestic sales has stabilised at the low level reported in Q3. Only 33 per cent of firms experienced an increase in sales over the past three months, while 25 per cent of firms reported a decrease in sales and?42 per cent report no change.

Activity in the retail and hospitality sectors remains particularly weak. Both sectors are firmly in 'negative territory ', with more firms reporting a decrease in sales than an increase over the past three months.

The hospitality sector is also struggling to operate at full capacity; three quarters (74 per cent) of hospitality businesses reported they are operating below capacity.

Only 24 per cent of business said their cash flow has increased over the last three months, while 30 per cent have seen it decrease.

After business confidence plummeted in Q3, firms continued to report a negative outlook for the future in Q4. Less than half (44 per cent) of firms expect their turnover to increase over the next 12 months, while 25 per cent expect a decrease.

Increases to business investment remain low. Only 21 per cent of firms reported an increase to plant/equipment investment over the past three months, while 57 per cent reported no change, and 22 per cent reported a decrease.

Concern about inflation also remains at record highs; 80 per cent of firms cited inflation as a growing worry to their business.

David Bharier, head of research at the British Chambers of Commerce (BCC), said: “The situation remains critical for the majority of SMEs who find themselves cut adrift by monumental inflationary pressures, often driving triple-digit percentage cost increases, particularly on energy.

“Business confidence remains worryingly low, with only a third of firms reporting improvements to sales, and less than a quarter reporting increased investment.

“While the change in administrations from Truss to Sunak may have stabilised markets, the Autumn Statement on 17 November appears to have had no impact on business confidence. ”

Director general of the British Chambers of Commerce, Shevaun Haviland (pictured) said:?????????

“The outlook from businesses remains bleak. Now, more than ever, we need to create the right conditions for firms to invest and grow.

“Providing businesses with clarity regarding the new energy support package must be top of the Government 's agenda for the New Year, after they failed to do so before Christmas.

“We urge Government to promote business growth by investing in public infrastructure and incentivising international trade, with a particular emphasis on making the UK the global hub for green innovation. ”