Posted by

Tom Nolan, Policy Manager

08 Jul 2014

Our quarterly economic survey is now in its 25th year and since its inception it has been one of the earliest indicators of the health of the UK economy. The Q2 2014 survey results are positive and point to continued economic growth, however, the pace of growth has slowed over the past three months. But that is to be expected after the unusually strong results recorded in the second half of 2013 and the early part of this year. That was unlikely to last and it appears the economy is now growing at a steady, rather than stellar, rate.

Among the most noticeable results this quarter are that three manufacturing balances are at their all-time highs: domestic sales (+42%), profitability confidence (+51%) and capacity utilisation (46%), showing that the manufacturing sector is continuing to strengthen – but this compares with six manufacturing balances at their all-time highs in Q1. In services, there were no balances at their all-time highs in Q2, compared with two service balances at their all-time highs in Q1 (export sales and orders). All the export and investment balances fell in Q2, for both manufacturing and services. Despite these falls, Q2 export balances and most investment balances are still above their average 2007 pre-recession levels.

In our press statements today we have highlighted that although growth is stable, challenges facing the economic recovery still remain. The results reinforce the case against the Bank of England making any hasty decisions on raising interest rates in the very short-term.

To mark the 25th anniversary of the survey we have launched a dedicated QES website. The site is a great way to interact with the survey and view the results over time. Make sure to check it out here.