REPEAT: MNI: Five Things We Learned From Q4 BCC Survey

By David Robinson

     LONDON (MNI) - Here are five things we learned from the British Chambers of

Commerce fourth quarter survey.

     1) It is doubtful that UK economic expansion picked up pace in the fourth

quarter compared to the third. In the dominant services sector orders and sales

were little changed, with the balance of firms reporting increased export sales

falling to +12 from +14 in Q3 and the domestic orders balance falling to +7 from

+8.

     2) The previous good news story, of manufacturing exports rising due to a

combination of strong overseas growth and sterling weakness, still held good but

the pace of expansion eased. The balance of manufacturing firms reporting

increased export sales fell to +25 in Q4 from +29 in Q3.

     3) The Bank of England Monetary Policy Committee's view at its December

meeting was that "that GDP growth in Q4 might be somewhat below that registered

in Q3," when it was 0.4% quarter-on-quarter. The official activity data out

Wednesday, for November trade, index of production and construction will tell us

more about the likely Q4 outturn, and the purchasing managers December indices

showed some improvement, but it is far from clear that the economic expansion is

gathering pace.

     4)  The BCC survey added to the weight of evidence that employers are

struggling to fill job vacancies. That should put upward pressure on pay but it

could well also prove to be a brake on growth. The percentage of services firms

reporting increased recruitment difficulties rose to 71% from 67%, the highest

in the history of the series.

     5)  The political climate has favoured pushing down on net migration to the

UK, but the economic reality is that employers are struggling to fill vacancies,

with sterling weakness and the uncertainty surrounding Brexit reducing the UK's

pulling power. Business lobby groups, and the BCC is one such, will push for

more support from government.

     "Labour and skills shortages are set to be the biggest potential drag

anchor on business in 2018 ... This must be the year ... government delivers

clarity, leadership and investment in people and infrastructure," Adam Marshall,

Director General of the BCC, said in a statement accompanying the data.

--MNI London Bureau; tel: +44 203-586-2223; email: david.robinson@marketnews.com