In its first upward revision since March 2011, the BCC forecast upgraded GDP growth for 2012 from -0.4% to 0.1%. However, it revised forecasts down for 2013 and 2014 from 1.2% to 1.0% and 2.2% to 1.8%, respectively.
The BCC's forecast said the manufacturing sector was still strong, but that it now accounts for only 10.5% of the whole economy. It predicts that manufacturing output will fall by 1.1% in 2012, followed by modest positive growth of 0.8% in 2013 and 1.0% in 2014.
John Longworth, director-general of the BCC, said the new forecast highlighted the challenges that face the UK economy over the coming months and years and called for George Osborne to focus on growth.
"We have always been behind the chancellor's aim of reducing the deficit, but this has to be supported with the right conditions that allow businesses to thrive, or we will fail to see the growth the economy so desperately needs," he added.
He also called for "decisive action" in the Chancellor's Autumn Statement tomorrow (5 December). "Business wants a hybrid strategy that delivers both deficit reduction and growth. This requires a laser-like focus on the implementation of important growth measures."
The BCC said the government should deliver "key infrastructure projects" across the UK and create a business bank in order to implement a radical and long-term change in the way companies access finance.
A spokesman from the Forum of Private Business (FPB) said the organisation was wary of predicted numbers and figures such as today’s BCC forecast.
"We can’t really remember when any organisation has got it spot on in recent years. There are so many external factors that can cause huge variations."
But he echoed the BCC’s hopes for measures that support business. "We need a credible announcement on fuel duty, action on business rates to help businesses manage their outgoings, tax breaks for private lenders and employers on NI."
