Economic growth appears to be holding up for now, but businesses are not confident enough to make big decisions on hiring and investment, according to a series of surveys published today.
Manufacturers are benefitting from rising export sales, the British Chambers of Commerce showed in its quarterly study, with domestic orders also improving.
The much larger services sector slowed down, however, and both industries expect to hire fewer staff next year.
“Although it is important not to take one quarter’s figures in isolation, our survey does show that growth has slowed further since the EU referendum. Firms are concerned over investment, hiring, and profitability,” said the BCC’s acting director general Adam Marshall.
“The Chancellor’s Autumn Statement is a crucial opportunity to incentivise business investment and overseas trade. Final and irrevocable decisions on infrastructure projects, both big and small, would also boost business confidence and support investment all across the UK.”
Business activity picked up further in all regions of England as well as Scotland and Wales, according to Lloyds Bank’s survey of companies across the country.
Employment increased as new orders grew, the bank said – “however jobs growth in more regions remained weak relative to trends seen throughout 2015, and earlier this year.”
“The weaker pound remains a focal point in the survey data,” said Tim Hinton at Lloyds.
“Improved competitiveness has no doubt given added impetus to the post-EU referendum rebound, but increasingly businesses are feeling the impact of higher import costs.”
But although businesses are displaying some caution, shoppers became increasingly upbeat in September according to a study of household spending from Visa Europe.
Spending increased by 2.4pc compared with the same month of 2015, largely as households splurged online – internet spending jumped by 6pc while purchases in physical shops edged up by just 0.1pc.
Holidays and trips out are particularly popular. Spending on hotels, restaurants and bars climbed 6pc while recreation and culture was up 6.8pc on the year.
The late summer heatwave knocked spending on clothes, however, which slid 1.3pc, and spending on transport and communications dipped 2.4pc.
“Household expenditure growth saw renewed signs of life in September, following a soft patch that has been evident since May in the lead up to the Brexit vote,” said economist Annabel Fiddes at IHS Markit.
“However, as momentum over the third quarter as a whole remains relatively subdued and consumer confidence is still down from that seen at the start of the year, expenditure may set itself on a lower overall growth trajectory given that a lot of uncertainty remains over the UK economic outlook.”
Source: Telegraph