The British Chamber of Commerce survey this morning contains the good news that confidence levels have risen sharply from the lows of recent quarters. It would be unwise to break open champagne, as we still cannot afford the imports.
The survey also shows that “almost all the key balances remain in negative territory, and most balances are still weak by historical standards”. The net balance for home sales for manufacturing did rise by 18 points, but it is still at a heavily negative minus 37%. Worse still, the balance for manufacturers home orders, what matters for future turnover, rose 15 points to rest at an equally heavily negative minus 37%.
Businesses need to generate cash to survive, and to have money to invest in the future. One of the worst figures in the survey was the one for manufactuuring cashflow. At minus 32% it is at “the lowest level since records are available”.
This survey shows that prospects and confidence levels have moved from dire to very worrying. After a long period of sharp downturn figures start to look better by comparison to very weak figures. That is not the same as a strong recovery.
The BCC are saying that unemployment goes on rising, hitting future demand. They report what their members see, which is too few orders and too little cash coming into their businesses. It is good they also report what their members feel, and they are feeling a bit more optimistic. We need that optimism to translate into more orders.