The latest quarterly economic survey from the British Chambers ofCommerce (BCC) — the largest private-sector survey of business sentiment and regarded as a leading indicator of UK GDP growth — found that key indicators of ‘UK economic health’ weakened considerably in the first quarter of 2019.

In the services sector, the percentage balance of firms reporting an increase in export sales stood at zero, its weakest level since 2009; in addition, the orders balance turned negative, with more firms reporting that orders have decreased than those reporting an increase — for the first time in eight years (the balance of firms reporting
improved domestic sales and orders also weakened significantly in the quarter).

Among manufacturers, the percentage of firms reporting an increase in domestic and export sales and orders dropped back to 2016 levels; while the balance of firms reporting improved cash-flow (regarded as a key indicator of business health, and declining over recent years), has now gone into “negative territory” for the first time since 2012.

Suren Thiru, head of economics at the BCC (www.britishchambers.org.uk), said: “Our latest survey suggests that UK growth nearly ground to a halt in the first quarter of 2019, with increasing anxiety over Brexit and weakening global economic conditions driving a significant deterioration in almost all the key indicators.

"The services sector suffered the more substantial loss of momentum in the first quarter, with both domestic and international activity slowing sharply.

“The manufacturing sector continues to struggle, amid tougher global and domestic trading conditions and rising cost pressures.

"The marked decline in the export indicators in both sectors suggests that net trade is likely to have been a drag on UK GDP growth in Q1.

"The deterioration in cash-flow is concerning, as it can leave firms more vulnerable to external shocks, including disruptions to supply chains.”