–UK BCC: Q3 Services Home Orders Balance -4% vs +5% Q2
–UK BCC: Q3 Services Home Sales +4% vs +12% in Q2
–UK BCC: Q3 Services Export Orders +8% vs +10 in Q2
–UK BCC: Q3 Manufacturing Export Sales +24% vs +31 in Q2
–UK BCC: Q3 Manufacturing Home Sales +17% vs +30% Q2
–UK BCC: Q3 Manufacturing Home Orders +13% vs +19% in Q2

LONDON (MNI) – The UK’s economic recovery lost momentum in the
third quarter, with service sector orders and expected employment
balances falling markedly, the British Chambers of Commerce Economic
Survey finds.

The BCC found the service sector performed much less strongly than
manufacturing. The survey’s finding will bolster the widespread view
that Q3 GDP growth will turn out to be only a fraction of that seen in
Q2, with many analysts predicting quarterly Q3 growth of 0.5% or less
compared to the 1.2% seen in Q2.

The BCC survey found the service sector home orders balance dropped
into negative territory, falling to -4% from 5% in Q2. The service
sector employment expectations balance dropped to 1% from 10% in Q2,
suggesting employment growth dried up almost entirely.

The survey also highlighted deteriorating cashflow in both
manufacturing and services. The Q3 services cashflow balance fell to
-11% from -3% and the manufacturing cashflow balance fell to zero from
1%.

The manufacturing home orders balance dropped to 13% from 19% in
Q2, while home sales dropped to 17% from 30%.

Export sales growth was stronger than domestic sales growth in both
manufacturing and services, but both sectors saw a marked slowdown
from Q2.

The manufacturing export sales balance came in at 24%, down from
31% in Q2, and the services sector balance dropped to 8% from 10% in Q2.

“The results for the third quarter of this year show a marked
slowdown in the pace of the recovery. The dismal performance of the
service sector is particularly disturbing, since it occurs even before
VAT is due to rise to 20%, and before the full impact of the tough
deficit-cutting measures take effect,” David Kern, the BCC chief
economist said.

“The results also show worrying falls in all the export balances,
at a time when rebalancing the economy must be a key aim,” Kern added.

Kern restated the BCC’s call for the Bank of England’s Monetary
Policy Committee to increase the monetary stimulus by relaunching
quantitative easing, calling for a stg50 billion increase in QE before
year end.

–London newsroom: 00 44 20 7862 7491; email: drobinson@marketnews.com

[TOPICS: MABDS$,MT$$$$,MB$$$$]