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Economy in Brief

British Chamber Of Commerce Survey Of Business Shows Increased Optimism
by Louise Curley   January 11, 2011

The British Chamber of Commerce quarterly survey of the manufacturing and service sectors of business for the last quarter of 2010 is more optimistic than the third quarter survey that reflected doubts about the new government's policies. The companies surveyed have apparently decided that improved export prospects may well outweigh the dampening effects of the governments austerity measures.

The excess of optimists over pessimists regarding home sales in the manufacturing sector has increased from 17% in the third quarter to 23% in the fourth quarter, an increase of 6 percentage points. The excess of optimists over pessimists regarding exports increased from 24% in the third quarter to 37% in the fourth quarter, an increase of 13 percentage points.

In the Service sector, the same trends were evident. Those expecting increased home sales outweighed, those expecting a decreased home sales by 5 percent, 1 percentage point above the third quarter figure. But those expecting increased export sales outweighed those expecting decreased export sale by 21 percent or 10 percentage points above the third quarter figure. The balances of opinion on home and export sales in the manufacturing and service sectors are shown in the first chart.

Another aspect of the survey showing more optimism is the confidence in profitability twelve months ahead. The excess of optimists over pessimist regarding profitability in the manufacturing sector rose from 23% in the third quarter to 30% in the fourth quarter. The corresponding data for the service sector were 4% and 17% The data are shown in the second chart.

British Chamber of Commerce Survey (% bal) Q4 10 Q3 10 Q4 09 Q/Q Chg  Y/Y Chg 2010 2009 2008
Manufacturing Sector
  Home Sales 23 17 3 6 20 18 -25 -11
  Export Sales 37 24 20 13 17 28 -6 9
Service Sector
  Home Sales 5 4 -2 1 7 7 -11 -6
  Export Sales 21 11 8 10 13 14 -2 8
Profitability Confidence  Next 12 mo.
  Manufacturing 30 23 17 7 13 - - -
  Services 17 4 13 13 4 - - -
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