Posted by

Tom Nolan, Policy Adviser

08 Oct 2013

Our survey has been in existence since 1989 and over the last 24 years it has become the largest of its kind in the UK and has gained a reputation of one of the most reliable indictors of how the real economy is performing.

The results for Q3 2013 show that the economy has made further progress, with manufacturing recording particularly strong growth. For both manufacturing and services, most key balances are stronger than in Q2, and all the critical balances are now stronger than their long-term historical averages. In fact some of the manufacturing indicators are at their all-time highs.

But there are some aspects of the results that are a cause for concern. The manufacturing plant & machinery investment balance, though still positive, fell, and is lower than in 2007, even though the share of firms at full capacity is at a record high. And several key service balances are lower than in 2007: employment expectations, cashflow, investment, and profitability confidence.

Overall, the Q3 results show the economy is moving in the right direction but many risks remain. At the global level new obstacles are emerging, such as the uncertainty over the US debt ceiling, and at the domestic level the combined impact of cutting the fiscal deficit, repairing the banking system, and the continued pressure on real wages, will inevitably limit growth in the next few years.

In these circumstances, it is vital that the government makes every effort to sustain the recovery and prevent setbacks. The Autumn Statement is just around the corner so the government must use that opportunity to help business growth. Action on business rates is just one thing we would like to see addressed then.

If you would like to read more about the survey you can find a list of tables and an infographic with all the key results here.