UK Economic Conditions Deteriorate On Weak Manufacturing Activity: BCC

The UK economic conditions weakened in the third quarter reflecting a marked deterioration in manufacturing sector activity, survey results from the British Chambers of Commerce showed Friday.

According to Quarterly?Economic?Survey, manufacturing firms reporting increased domestic sales fell to zero. The domestic order balance entered negative territory for the first time in seven years, to -7 in the third quarter. Both are at their weakest since the fourth quarter of 2011.

The balance of manufacturing firms reporting increased export sales dropped to +3, the lowest level since the fourth quarter of 2015 and the balance for export orders went negative and came in at its weakest level since the third quarter of 2009.

The dominant services sector reported a decrease in the balance of firms reporting increased domestic sales and orders, and export orders, the survey showed. The domestic sales balance of service providers slid to 15 and the balance for domestic orders dropped marginally to 9 in the third quarter.

Manufacturers' cashflow position - a key indicator of the financial health of a business, deteriorated. In the services sector, cashflow held steady at a low level.

"A stuttering services sector coupled with a worrying downturn in manufacturing activity indicates that any bounce back in UK GDP growth from the contraction in the second quarter is likely to be underwhelming at best," Suren?Thiru, Head of Economics at the BCC, said.

"This is a reality check, not scaremongering or politicking. These are some of the worst figures we've seen in a decade - and jobs, businesses, and the future success of our communities are on the line," Adam Marshall, Director General of the BCC, said.

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