Business leaders expect recovery to start this year

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The Independent Online
BUSINESS surveys released yesterday suggest that despite weaker official figures a gradual economic recovery is in prospect for late this year, writes Peter Torday.

Surveys of business by the British Chambers of Commerce and 3i, the venture capital group, paint a picture that contrasts sharply with recent economic statistics suggesting that the economy may be in danger of slipping into recession again.

The British Chambers of Commerce, which covers 3,818 manufacturing firms and 4,995 service companies employing a total of more than a million, said that 'a slow and hesitant recovery is under way'. But it warned that the rate of improvement among small and medium-sized business was slowing and the unevenness of regional performance was consistent with an economy teetering between recession and recovery. 'This gives rise to doubt as to the sustainability of this continued upturn.'

The chamber's survey of the second quarter showed that, for the first time in two years, more firms in manufacturing and services have enjoyed growing domestic order books.

However, there were indications of a slowdown in the growth of exports. Large firms were continuing to lay people off, although at a falling rate. The BCC also reported an upturn in business confidence.

The 3i survey of business confidence showed that last month its companies were more optimistic about the general economic outlook. The 3i confidence index rose to its highest level since September 1988.

In another potential fillip for recovery-watchers, Boots, the retailer, said there was an overall increase in sales of 6.9 per cent in all its divisions in the three months to June. Sir Christopher Benson, the chairman, said: 'Some would say that the recovery has faltered in recent weeks. We are bucking the trend.'