According to the British Chambers of Commerce’s (BCC) Quarterly Economic Survey (QES), after a steady improvement in UK business conditions in the first half of this year, leading indicators stagnated or fell in the third quarter (Q3).

Small and medium enterprises (SMEs) comprise 91 percent of the survey respondents.

Overall, 35 percent of respondents reported an increase in home sales over the past three months, while 21 percent reported a decrease. It is slightly worse than the previous quarters.

After UK business conditions continued to improve in H1 2024, leading indicators stalled or fell in Q3, a British Chambers of Commerce survey found. Overall, 35 percent of respondents reported an increase in home sales over the past three months, while 21 percent reported a decrease. Confidence that turnover will increase over the next 12 months also fell to 56% from 58% in Q2.

Confidence in turnover growth over the next 12 months also fell to 56% from 58% in Q2.

Overall, 23 percent of respondents reported an increase in plant/equipment investment in the past three months, while 59 percent reported no change, and 18 percent reported a decrease.

There are wide sectoral disparities; 21 percent of retail firms reported a decrease in investment, while production and manufacturing firms saw an increase of 30 percent.

A BCC release said the percentage of firms expecting their prices to rise fell to 39 percent last quarter.

Forty-eight percent of responding firms say taxation is a greater concern now than three months ago, compared with 36 percent of businesses in the second quarter. Concern about other external issues is diminishing. Forty-six percent of firms say they are more concerned about inflation than in the previous quarter (49 percent in Q2 2024 and 82 percent in Q2 2022).

“On the domestic front, many businesses are increasingly concerned about the direction of economic policy, and taxes have now become their main concern. A major escalation of conflict in the Middle East will also be a major factor. The level remains the Achilles heel of the UK economy. David Braher, Head of BCC Researchsaid.

“Despite interest rate cuts and inflation softening, most SMEs are still reluctant to invest. Further interest rate cuts in the coming months will help reduce borrowing costs, but SMEs will need support to adopt skills and technologies that will help increase productivity.

Fibre2Fashion News Desk (DS)