Posted by

Tom Nolan, Policy Adviser

02 Apr 2013

Since 1989 we have been conducting a quarterly economic survey of businesses throughout the country. The survey is now is the largest and most representative of its kind and has gained a reputation as one of the UK’s most reliable economic indicators. This quarter the survey received over 7,300 responses, of which almost half were exporters.

The Q1 2013 results show welcome progress compared with Q4 2012. For both manufacturing and services, most key balances are stronger in Q1 than in Q4, but the improvements are usually modest. Most balances, in both sectors, are still below their pre-recession levels in 2007. The strength of the export balances is one of the most positive features of the Q1 survey. It is noticeable that the service export balances are near their 1994 all-time highs, even though most other service sector balances are below their long-term historical averages. However, it is disappointing that most employment balances have weakened in Q1, in both sectors, in contrast to the increases seen in other key areas.

Most confidence and investment balances rose slightly in Q1, but are still below their pre-recession levels in 2007. Plans to raise prices are weaker in Q1, particularly for manufacturers, mainly reflecting reduced pressures from raw material costs. Overall, the Q1 results support our assessment that the economy will record subdued growth in 2013.

Many measures announced in the recent Budget are to be welcomed but they must be built upon. In particular we would like to see greater efforts to unlock massive private funding to renew Britain's infrastructure that will create confidence in the short-term, jobs in the medium-term and growth in the long-term.