The UK’s economic recovery has continued to gather pace with service exports rising to their highest level in almost 25 years.
The British Chamber of Commerce’s Quarterly Economic Survey found that the balance of service export deliveries jumped to 36 per cent, its highest level since the survey began in 1989, while orders rose three points to 29 per cent, the highest since 1994.
BCC director general John Longworth says: “The sheer strength of our export balances shows that companies have untapped potential to expand. It must be recognised that recovery will only be turbo-charged if we can create a truly enterprise-friendly economy here in the UK.”
The survey, which consists of responses from more than 7,400 businesses, shows UK firms remains resilient with manufacturing and services strengthening in the second quarter compared to the first three months of the year.
But despite the improvement, most indicators remain below their 2007 pre-recession levels and cashflow remains weak, with the service sector 20 points below its 1997 high.
The report also suggests that the economy will continue to strengthen gradually over the next year, with growth slowly improving.
It found that employment balances rose in the second quarter, following their decline in the first quarter, and in regards to manufacturing, the balance jumped from 11 to 19 per cent in the second three months of the year while services more than doubled from six to 15 per cent.
In addition confidence in both improving manufacturing turnover and manufacturing profitability increased seven points to 51 per cent and from six points to 39 per cent respectively.
Longworth adds: “It is incredibly encouraging to see export deliveries reach record levels, and the upturn in employment balances is reassuring in spite of the risks at home and abroad.
“However the falls in the service investment balances and the weak cashflow balances in both sectors are a warning that economic growth could be slow, and a reminder that a sustained upturn cannot be taken for granted. For these reasons, business access to finance, and working capital in particular, must be assured.”
Elsewhere, adding to the spate of recent positive data, the June purchasing managers’ construction survey indicated that overall activity rose modestly for a second successive month, which is the first time this has happened since May 2012. In addition, new business volumes rose for a second month running and at the fastest rate for 13 months.