Businesses in the private sector can drive growth during 2011, but the government must act forcefully to provide support, a leading business group has warned.
The British Chambers of Commerce (BCC) is calling on the government to help private sector companies by implementing a better support network for businesses, which will enable more firms to start-up, boost employment, strengthen businesses and support export potential.
A recent survey by the BCC, which compiled responses of over 5,600 businesses across the UK, found that economic growth slowed in the fourth quarter (Q4) of 2010 as gross domestic product (GDP) slowed to around 0.4% or 0.5% in the last three months of the year.
David Frost, director general of the BCC, said: “We must encourage more new start-ups, more employment, create stronger companies and support export potential. While the BCC’s survey points to our economy recovering, we call on the government to take concerted action now to ensure recovery continues. Only a clear growth strategy set alongside existing plans for deficit reduction, will give businesses the confidence to grow through 2011 and beyond.”
With business confidence remaining high, the manufacturing sector was shown to be a ‘star performer’, as UK exports continued to grow, reaching their strongest level since Q4 1994. However, the service sector performance remained ‘fragile’, compounded by December’s spell of bad weather, which the BCC says is worrying given that the impact of the recent VAT rise to 20% had not yet been felt by firms.
Frost added: “UK businesses have witnessed some of the toughest years in recent memory. Our latest economic survey points to some encouraging signs amongst UK firms, particularly in manufacturing.
“However, as the figures for the service sector show, we’re not out of the woods yet. Faced with public sector cuts and cost pressures, ensuring the health of UK businesses is critical to a sustained economic recovery.”
© Crimson Business Ltd. 2011