The number of firms reporting a rise in export sales and improved cash flow has dropped to record lows, a study has revealed.
The figures form part of the British Chamber of Commerce’s (BCC) quarterly economic survey – the largest private sector survey of business sentiment involving more than 7,000 businesses.
According to the report, the “slowing economy”, growing Brexit uncertainty and rise in business costs has attributed to a “deterioration in many gauges” of the UK’s economic strength.
In the services sector, the UK’s biggest industry, the percentage balance of firms reporting an increase in export sales stood at zero – representing the weakest level recorded since 2009. Additionally, the orders balance turned negative, meaning for the first time in eight years, more firms reported orders decreasing than those reporting an increase.
Alarmingly, the balance of firms reporting improved domestic sales and orders “also weakened”.
Over the same period recorded, cash flow levels – a key component of business health – declined into negative territory for the first time since 2012.
Relentless Brexit uncertainty has also taken its toll on the manufacturing and services sectors, with the number of firms looking to invest in either plant and machinery or training both dropping to their lowest level in eight years. The same deliberation is echoed in the number of businesses who are confident they will turn a profit or increase turnover.
Commenting on the figures, Suren Thiru, Head of Economics at the BCC, said: “Our latest survey suggests that UK growth nearly ground to a halt in the first quarter of 2019, with increasing anxiety over Brexit and weakening global economic conditions driving a significant deterioration in almost all the key indicators in the quarter.
“The deterioration in cash flow is concerning as it can leave firms more vulnerable to external shocks, including disruptions to supply chains.
“The forward-looking indicators are disappointingly downbeat with weakening orders, confidence and investment intentions pointing to precious little growth over the coming quarters, unless substantial action is taken.”
Adam Marshall, Director General of the BCC, added: “Our findings should serve as a clear warning that the ongoing impasse at Westminster is contributing to a sharp slowdown in the real economy across the UK. Business is hitting the brakes – hard.”