UK’s two-speed economy widens
The gap between the struggling manufacturing sector and the buoyant service sector has continued to grow, according to the latest survey.
The British Chambers of Commerce (BCC) found that during the third quarter of 2003, the UK’s manufacturing sector suffered a sharp downturn whilst the service sector experienced a welcome rebound.
The BCC argued that the results confirmed the UK’s two-speed economy.
The BCC’s survey highlighted that, despite a slight increase in manufacturing, employment, home sales and orders, and exports all fell during the third quarter of 2003.
The BCC’s Director General, David Frost, called for action to improve productivity and the competitiveness of the UK’s industrial sector in the Chancellors’ forthcoming Pre-Budget statement.
Mr Frost commented: ‘Manufacturing is the bedrock of our industrial performance and the weakness in manufacturing is a case for serious concern. Efforts to increase the productivity and competitiveness of UK manufacturing must therefore be at the forefront of the national economic agenda and particularly for the Chancellor in his pre-budget report.’
In comparison, during the same period the service sector sales reported its home sales reach their highest figure since the fourth quarter of 2002 and home orders increased to their highest level since the second quarter of 2002.
David Kern, Economic Adviser to the BCC stated that it would have to be seen if the recovery in the service sector could be sustained, as the outlook for the sector remained ‘highly uncertain’.
Mr Kern added: ‘The manufacturing sector’s overall position remains disappointingly weak and the Q3 figures point at best to a fragile recovery later in the year and in 2004. In services, the general Q3 improvement came after a period of pronounced weakness in the first half of 2003, and the export indicators are still relatively weak. In spite of the Q3 upturn, recovery prospects in the service sector remain highly uncertain.’
