ISSN 2398-4406
BRITISH CHAMBERS OF COMMERCE QUARTERLY ECONOMIC SURVEY
KEY FINDINGS Q1 2017
The British Chambers of Commerce (BCC) Quarterly Economic Survey – Britain’s largest and most authoritative private sector business survey – based on more than 7,300 responses from firms across the UK in Q1 2017
– shows the manufacturing sector performing strongly in the first quarter of the year, particularly in the exports market. However, rising overheads and raw material costs present a risk to growth in the medium term.
“
In the here and now, many businesses are resilient and experiencing solid growth. Many firms tell us their shortterm expectations are strong, but that the medium-term picture is far from clear.
The rise in inflation seen since last year’s EU referendum is the biggest immediate pressure facing most firms.
While manufacturers have enjoyed a good quarter, they are facing higher costs at the factory gates, which
increasingly translates into companies having to raise their own prices.
Our survey, with deep participation all across the UK, demonstrates the fact that there are longstanding structural
issues here at home that we need to tackle to sustain success in the future. The competitiveness of firms depends
on a bold domestic economic policy - not just a good Brexit deal.
“
Dr Adam Marshall Director General, British Chambers of Commerce
Domestic Sales
AT A GLANCE
Positive balance (+) = growth | Negative balance (-) = contraction
0%
+25%
-25%
+50%
+20%
+75%
-50%
+50%
+22%
-75%
60%
1.5%
40%
1.0%
20%
0.5%
0%
0.0%
+25%
-25%
-50%
-75%
UK GDP Growth vs. QES Domestic Sales
0%
+75%
-20%
-0.5%
-40%
+100%
-100%
...of manufacturers reported improved
domestic sales in Q1 2017, up from
+15% in Q4 2016
+100%
-100%
...of service firms reported improved
domestic sales in Q1 2017, up from
+15% in Q4 2016
QES %
-60% Balance
2005
2007
GDP Growth
-1.0%
GDP %
Growth (ONS)
2009
2011
Service Sector QES
2013
2015
-1.5%
2017
Manufacturing QES
Balance of firms reporting improved export sales
0%
+25%
Employment Growth
Export Sales
-25%
50%
0%
+25%
-25%
40%
30%
-50%
+50%
+26%
-75%
+75%
-50%
+50%
10%
+10%
-75%
20%
+75%
0%
-10%
+100%
-100%
...of manufacturers reported
improved export sales in Q1 2017,
up from +16% in Q4 2016
+100%
-100%
...of service firms reported
improved export sales in Q1 2017,
up from +8% in Q4 2016
0%
2017
40%
+25%
-25%
2013
2015
Service Sector QES
Balance of firms that grew their workforce
0%
+25%
-25%
-20%
QES %
-30% Balance
2005
2007
2009
2011
Manufacturing Sector QES
30%
20%
-50%
+50%
+19%
-75%
+75%
-50%
-75%
+50%
+15%
10%
0%
-10%
+75%
-20%
-30%
-100%
+100%
...of manufacturers reported an
increase in their workforce in Q1
2017, down from +23% in Q4 2016
-100%
+100%
...of service firms reported an increase
in their workforce in Q1 2017, down
from +16% in Q4 2016
-40% QES %
Balance
-50%
2005
2007
2009
2011
Manufacturing Sector QES
2013
2015
Service Sector QES
2017
www.britishchambers.org.uk | @britishchambers
BRITISH CHAMBERS OF COMMERCE QUARTERLY ECONOMIC SURVEY
LOOKING AHEAD
The Quarterly Economic Survey (QES) examines business sentiment on a range of forward looking indicators,
including investment intentions, turnover confidence, and prices. In Q1 2017, the forward looking indicators
show that while confidence in turnover and profitability is improving, investment intentions remain low. More
businesses have increased their employment expectations, although recruitment difficulties remain high.
0%
+25%
-25%
Firms facing pressures to raise prices due to
the following factors:
0%
-50%
+25%
-25%
+50%
-50%
+50%
80%
Manufacturing Sector
70%
Service Sector
60%
50%
+47%
Prices
-75%
+75%
+32%
-75%
40%
+75%
30%
20%
+100%
-100%
...of manufacturers expect their
prices to increase, down from +52%
in Q4 2016
+100%
-100%
...of service firms expect their
prices to increase, up from +30% in
Q4 2016
0%
-25%
0%
Raw materials Financial costs
Other
overheads
50%
+25%
-25%
Pay
settlements
Balance of firms increasing investment in training
0%
+25%
10%
40%
Employment Expectations
Investment
30%
-50%
+50%
+13%
-75%
+75%
-50%
+50%
+75%
0%
-10%
+100%
-100%
...of manufacturers intend to increase
investment in plant & machinery, down
from +19% in Q4 2016
-20%
+100%
-100%
...of service firms intend to increase
investment in training, up from +14% in
Q4 2016
0%
2013
2015
Service Sector QES
2017
50%
+25%
-25%
QES %
-30% Balance
2005
2007
2009
2011
Manufacturing Sector QES
Balance of firms expecting to grow their workforce
0%
+25%
-25%
40%
30%
-50%
+50%
-50%
+50%
20%
10%
+24%
-75%
+75%
+23%
-75%
0%
+75%
-10%
-20%
-30%
+100%
-100%
...of manufacturers expect to grow their
workforce over the next three months,
up from +19% in Q4 2016
+100%
-100%
...of service firms expect to grow their
workforce over the next three months,
up from +18% in Q4 2016
0%
-50%
+50%
+44%
-75%
+25%
-25%
+75%
-50%
-75%
+50%
+39%
-40% QES %
Balance
-50%
2005
2007
2009
2011
Manufacturing Sector QES
2013
2015
Service Sector QES
2017
UK GDP Growth vs. balance of firms confident
80%
turnover will increase
0%
+25%
-25%
Confidence
10%
+18%
-75%
20%
2.0%
60%
1.5%
40%
1.0%
20%
0.5%
0%
0.0%
+75%
-20%
-40%
-100%
+100%
...of manufacturers are confident
turnover will increase in the next 12
months, up from +43% in Q4 2016
-100%
+100%
...of service firms are confident turnover
will increase in the next 12 months, up
from +35% in Q4 2016
-0.5%
GDP %
Growth (ONS)
QES %
-60% Balance
2005
2007
GDP Growth
2009
2011
Service Sector QES
2013
2015
-1.0%
-1.5%
2017
Manufacturing QES
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BRITISH CHAMBERS OF COMMERCE QUARTERLY ECONOMIC SURVEY
IN FOCUS RAW MATERIALS
The percentage of manufacturers reporting the rising cost of ‘raw materials’ as the biggest factor
in price rises stood at its highest level since Q4 2011. This heat map shows the breakdown of this
indicator by UK region:
Scotland
41%
North East
86%
Yorks & Humber
North West
73%
67%
Northern Ire
East Midlands
84%
73%
East of
England
Wales
82%
79%
London
48%
West Midlands
56%
South West
78%
South East
81%
In the manufacturing sector, the regions which saw the highest percentage of firms reporting the rising
cost of ‘raw materials’ as the biggest factor in price rises were the North East at 86%, followed by
Northern Ireland at 84%, and Wales at 82%. The regions and nations which saw the lowest percentage
of manufacturers reporting raw material as the biggest factor were Scotland at 41%, London at 48%, and
the West Midlands at 56%.
www.britishchambers.org.uk | @britishchambers
BRITISH CHAMBERS OF COMMERCE QUARTERLY ECONOMIC SURVEY
ABOUT THE QES
The Quarterly Economic Survey is the flagship economic
survey of the British Chambers of Commerce. It is a
prominent tool used to measure the state of business
sentiment and is monitored by a range of national and
international organisations, such as the Bank of England,
HM Treasury, and European Commission.
The BCC Q1 2017 QES is made up of responses from more
than 7,300 businesses across the UK. Firms were questioned
between 20 Feb and 13 March 2017. In the manufacturing
sector, 1,783 firms responded, employing approximately
333,000 people. 66% (1,176) of manufacturing respondents
were exporters. In the services sector, 5,5519 businesses
responded, employing approximately 616,000 people. Of
the services sector participants, 38% (2,095) were exporters.
Methodology
QES results are generally presented as balance figures the percentage of firms that reported an increase minus
the percentage that reported a decrease. If the figure is
a plus it indicates expansion of activity and if the figure
is a minus it indicates contraction of activity. A figure
above 0 indicates growth, while a figure below 0 indicates
contraction.
For example if 50% of firms told us their sales grew and 18%
said they decreased the balance for the quarter would be
+32% (an expansion).
If 32% told us their sales grew and 33% said they fell the
balance would be -1% (a contraction).
This report has been prepared by the British Chambers of Commerce. Further information
about any of the region and nation surveys may be obtained from the following:
National
Coordinator: David Bharier
[email protected]
British Chambers of Commerce,
65 Petty France, London SW1H 9EU
(020 7654 5800)
Scotland
Coordinator: Roisin Milligan
[email protected]
Scottish Chambers of Commerce
(0141 204 8366)
East Midlands
Coordinator: Chris Hobson
[email protected]
Derbyshire, Nottinghamshire &
Leicestershire Chamber of Commerce,
(0116 204 6606):
Contributing Chambers: Derbyshire,
Nottinghamshire & Leicestershire,
Northamptonshire, Lincolnshire,
West Midlands
Coordinator: Thomas Byrne
South East
Coordinator: David Bharier (BCC);
Contributing Chambers:
Kent Invicta, Hampshire, Surrey, Sussex,
Isle of Wight, Milton Keynes and
Thames Valley
South West
Coordinator: David Bharier (BCC);
Contributing Chambers:
Business West, Dorset, Cornwall,
Somerset, and Devon
[email protected]
North East
Coordinator: Ross Smith
[email protected]
North East Chamber of Commerce
(0191 3861133)
North West
Coordinator: Christian Spence
[email protected]
Greater Manchester Chamber
of Commerce (0161 237 4045):
Contributing Chambers: St Helens,
Liverpool, North & West Lancashire,
East Lancashire, Greater Manchester,
Cumbria, South Cheshire, Wirral
Yorkshire & the Humber
Coordinator: David Bharier (BCC);
Contributing Chambers: Barnsley &
Rotherham, Doncaster, Sheffield, Hull &
Humber, West & North Yorkshire, and
Mid Yorkshire
Black Country Chamber of Commerce
(01902 912319):
Contributing Chambers: Coventry &
Warwickshire, Birmingham, Black
Country, Staffordshire, Shropshire,
Herefordshire & Worcestershire
Wales
Coordinator: Elgan Morgan
[email protected]
South Wales Chamber of Commerce
(01633 242721);
Contributing Chambers: South Wales,
West Cheshire and North Wales
London
Coordinator: Thomas Wagemaakers
[email protected]
London Chamber Of Commerce and
Industry, (020 7248 4444)
Northern Ireland
Coordinator: Christopher Morrow
Christopher.Morrow@
northernirelandchamber.com
Northern Ireland Chamber of
Commerce (028 9024 4113)
East of England
Coordinator: David Bharier (BCC);
Contributing Chambers: Bedfordshire,
Cambridgeshire, Essex, Hertfordshire,
Norfolk and Suffolk
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