Manufacturing 'close to stagnation' amid falling sales

Manufacturing in the UK is "close to stagnation" amid falling domestic and export sales, according to a study.

The British Chambers of Commerce said a survey of 7,500 firms showed that exports in the services sector had also fallen in recent months.

Services firms remained "resilient" to pressure from the global economy, but manufacturers continued to struggle, said the report.

The research, covering the final three months of 2015, suggested positive economic growth in 2016, albeit at a slower pace, and built mainly off the back of companies in the services industry.

Firms in both sectors said they faced increased pressures for higher pay rises.

John Longworth, director general of the BCC, said: "While these latest figures demonstrate growth, it is clear that there are warning signs of potential trouble ahead.

"The declines across the board should send a message to Government that UK firms are in desperate need of a favourable business environment, not more administrative burdens.

"It is not enough to rely upon consumer spending and the housing market to grow the economy, nor to rely purely on services to drive export growth. We need a rebalanced economy if we are to continue punching above our weight on the global stage. The quality and variety of our goods and services is what gives Brand Britain its strength overseas."

The BCC urged the Government to make 2016 a "year of action" on infrastructure, skills and finance access for firms.