In a stark contrast to reports this week that Britain is heading for a double-dip recession, the latest findings from the British Chamber of Commerce shows encouraging signs of recovery for the UK's businesses.


Most of the 8,000 businesses surveyed reported growth and improved confidence in Q1 2012, with many reporting increases on the last quarter.

It's a welcome improvement on the results of Q4 2011, but the BCC says the growth is still "too weak" as the balances still fall short of where they were in 2007 before the recession, and that the government needs to do more to boost the economy. Manufacturing businesses are said to now be at a satisfactory level, but the service sector balances are still sluggish.

Welcome increases were seen in balances measuring domestic and export activity, and more businesses are looking to invest in employing more staff, training, plant and machinery. However, the results also showed cashflow is still a major problem, and despite concerns about inflation decreasing, recent increases in oil and food prices may alter this over the next few months.

In terms of domestic balances, manufacturing and service sector balances for home deliveries and forward-looking orders rose to the strongest levels since Q2 2011. Exporting activity also strengthened in Q1 2012.

Confidence among businesses has also increased on the previous quarter, but the BCC report it is still "weak by historical standards, particularly for services." Manufacturers' expectations for increasing turnover and profitably jumped, however, to levels last seen in Q2 2011.

The manufacturing cashflow balance fell one point to +1%, and services rising four points, to -4%, both very weak levels according to the BCC.

BCC director general John Longworth said: "It's encouraging to see that businesses are feeling more confident at the start of 2012 than they were at the end of 2011. But that underlines the need to support and foster growth and investment by companies to ensure that the increases we have seen in the first quarter continue.

"The UK economy is still facing huge challenges and the recovery is much too slow. The UK has the potential to recover, but to achieve that the government has to set businesses free to grow.'

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